§ 10.23 p.m.
§ The Financial Secretary to the Treasury (Mr. Glenvil Hall)I beg to move,
That the profits tax payable on distributed profits (and sums treated as such) shall be increased by—The purpose of this Resolution is to authorise the introduction of a Bill to increase the rate of Profits Tax from 25 to 30 per cent. on distributed profits. It is proposed that the rate shall come into force as from 1st October. My right hon. and learned Friend dealt with this matter both on 27th September and yesterday, and unless the Committee so desires it, I do not propose at this juncture to say any more. Next week we shall be dealing with the Bill, and there will be an opportunity to go into the matter in greater detail.and that any Act of the present Session giving effect to this Resolution may contain provisions 1644 consequential on or incidental to any of the foregoing provisions of this Resolution.
- (a) substituting as respects any chargeable accounting period ending after the end of September, nineteen hundred and forty-nine—
- (i) thirty per cent. for twenty-five per cent. as the rate of any tax not being a distribution charge; and
- (ii) twenty per cent. for fifteen per cent. as the rate of any relief for non-distribution and as that of any distribution charge;
- (b) dividing for all or any purposes of the profits tax any accounting period of a body corporate, unincorporated society or other body falling partly before and partly after the end of that month into two chargeable accounting periods ending and beginning at the end of that month;
- (c) treating dividends declared on or after the twenty-seventh of that month wholly or partly as a distribution for a chargeable accounting period ending after the end of that month;
§ 10.24 p.m.
§ Mr. R. A. Butler (Saffron Walden)It is our intention to vote against this Ways and Means Resolution in order to indicate our grave dissatisfaction that this proposal of the Chancellor of the Exchequer has had such a meagre explanation by himself and by the Financial Secretary. It is our intention to reserve our main arguments for the Debate on the Second Reading which will take place next week, but I should like on this occasion very shortly to establish our strongest objection to this proposal.
The Chancellor in his original remarks called it "rough justice." It seems to us a foolish and short-sighted injustice. We shall keep our facts and figures until the Debate which is to take place, but we think that it is exceptionally shortsighted to appeal to firms to press their exports in dollar markets and then to impose a fine upon them if they succeed in 1645 exporting in dollar markets. We think this is the exact opposite of incentive. It is discouragement, and our first investigations into this subject indicate that, first, a large number of firms will have to submit to this extra burden while not profiting from devaluation at all, and secondly, a large number of firms to whom the extra cost of raw materials due to devaluation out-balances benefits obtained, and that is a very important point which we shall develop. Lastly, to nearly all firms the result of this extra tax means that so much less can be put aside either for wear and tear or for replacement.
The Chancellor in his Budget has himself indicated that he is interested in this subject. At the moment, when he has appointed a committee to look into the question, he imposes a further tax upon industry, upon development and upon enterprise. We therefore regard this as a flagrant example of injustice and of the way the Chancellor chooses to discourage industry in capital development at the present time.
We shall develop these and other matters in the course of the Second Reading Debate, and according to our agreement with the Government I will not develop them further tonight. This is a hasty and ill-conceived project which will discourage enterprise and fail to appease organised labour.
§ 10.27 p.m.
§ Mr. Gallacher (Fife, West)I do not want to take up much time. We shall have another opportunity to put forward our case, but I cannot let this occasion pass without drawing attention to the splendid opportunity which hon. Members opposite have had. We have all agreed that there should be cuts, except for a small group, but hon. Members opposite have said that the cuts are not big enough. Here is a chance to try to make them big enough. Why do they not prepare an Amendment proposing a cut not of 30 per cent. but of 50 per cent.? If they do not do so, my hon. Friends and I will do so. I ask hon. Members to consider very seriously the necessity of making a real cut into the fantastic profits which are being made at present.
§ 10.29 p.m.
§ Mr. Piratin (Mile End)I should like to say on behalf of my party that we shall have much pleasure in a few minutes in taking part in the Division with Members of the Labour Party against the Tories. I also regret that it is not proposed to make a greater tax. I should like to say one thing so that I shall not have to raise it next Thursday on the Second Reading. [Interruption.] I am on my feet now, and I intend to remain so. I have been waiting two days to speak in the Debate.
The instance I want to give which is germane to the question is that of the export of motorcars. The Ford Company, exporting motorcars to the United States, have been able to increase their profits in this way. The Ford V-Eight sold in the United States at 1,420 dollars, which was £355 at four dollars to the pound. The same motorcar, which has since been reduced in price, now sells at 1,170 dollars, a reduction of 250 dollars, but its conversion into pounds at the new rate of 2.80 gives Fords £428, an increase of £63. [Interruption.] I speak from memory, and I have a good memory, too. They are getting 18 per cent. over the former price.
Argument may be raised by the hon. Member for Edgbaston (Sir P. Bennett) that this arises from increased cost of materials. Is it to be supposed that the increase in the cost of materials is 18 per cent. already? We know perfectly well that the cost of materials is only a fraction of the normal cost of a motorcar; much of it is labour and profits. Therefore, I heartily support this Motion. I regret, with my hon. Friend the Member for West Fife (Mr. Gallacher), that the tax is not one of 50 per cent.
§ Sir Peter Bennett (Birmingham, Edgbaston)I cannot let these figures go, because they are absolutely incorrect. The hon. Gentleman has not the figures. By the time this is debated on a future occasion, I will endeavour to have the correct figures and prove how hopelessly incorrect the hon. Gentleman's figures are.
§ Question put.
§ The Committee divided: Ayes, 329; Noes, 204.
1651| Division No. 263.] | AYES | [10.30 p.m. |
| Acland, Sir Richard | Ede, Rt. Hon. J. C. | Lee, F. (Hulme) |
| Adams, Richard (Batham) | Edelman, M. | Lee, Miss J. (Cannock) |
| Albu, A. H. | Edwards, John (Blackburn) | Leonard, W. |
| Alexander, Rt. Hon. A. V. | Edwards, Rt. Hon. N. (Caerphilly) | Leslie, J. R. |
| Allen, A. C. (Bosworth) | Edwards, W. J. (Whitechapel) | Lewis, A. W. J. (Upton) |
| Allen, Scholefield (Crewe) | Evans, Albert (Islington, W) | Lewis, J. (Bolton) |
| Alpass, J. H. | Evans, E. (Lowestoft) | Lipton, Lt.-Col. M. |
| Anderson, A. (Motherwell) | Evans, S. N. (Wednesbury) | Logan, D. G. |
| Attewell, H. C. | Fairhurst, F. | Longden, F. |
| Attlee, Rt. Hon. C. R. | Farthing, W. J. | Lyne, A. W. |
| Austin, H. Lewis | Fernyhough, E. | McAdam, W. |
| Awbery, S. S. | Field, Capt. W. J. | McEntee, V. La. T. |
| Ayles, W. H. | Fletcher, E. G. M. (Islington, E.) | McGhee, H. G. |
| Ayrton Gould, Mrs. B. | Follick, M. | McGovern, J. |
| Bacon, Miss A. | Foot, M. M. | Mack, J. D. |
| Baird, J. | Forman, J. C. | McKay, J. (Wallsend) |
| Balfour, A. | Fraser, T. (Hamilton) | Mackay, R. W. G. (Hull, N. W.) |
| Barton, C. | Freeman, J. (Watford) | McKinlay, A. S. |
| Bechervaise, A. E. | Freeman, Peter (Newport) | McLeavy, F. |
| Bellenger, Rt. Hon. F. J. | Gaitskell, Rt. Hon. H. T. N. | MacPherson, Malcolm (Stirling) |
| Berry, H. | Gallacher, W. | Macpherson, T. (Romford) |
| Beswick, F. | Ganley, Mrs. C. S. | Mallalieu, E. L. (Brigg) |
| Bevan, Rt. Hon. A. (Ebbw Vale) | Gibbins, J. | Mallalieu, J. P. W. (Huddersfield) |
| Bevin, Rt. Hon. E. (Wandsworth, C.) | Gibson, C. W. | Mann, Mrs. J. |
| Bing, G. H. C. | Gilzean, A. | Manning, C. (Camberwell, N.) |
| Binns, J. | Glanville, J. E. (Consett) | Manning, Mrs. L. (Epping) |
| Blackburn, A. R. | Gooch, E. G. | Marquand, Rt. Hon. H. A. |
| Blenkinsop, A. | Greenwood, A. W. J. (Heywood) | Marshall, F. (Brightside) |
| Blyton, W. R. | Grey, C. F. | Mathers, Rt. Hon. George |
| Boardman, H. | Grierson, E. | Mayhew, C. P. |
| Bottomley, A. G. | Griffiths, D. (Rother Valley) | Medland, H. M. |
| Bowden, H. W. | Griffiths, Rt. Hon. J. (Llanelly) | Mellish, R. J. |
| Braddock, Mrs. E. M. (L'pl. Exch'ge) | Griffiths, W. D. (Moss Side) | Middleton, Mrs. L. |
| Braddock, T. (Mitcham) | Guest, Dr. L. Haden | Mikardo, Ian |
| Bramall, E. A. | Gunter, R. J. | Mitchison, G. R. |
| Brook, D. (Halifax) | Guy, W. H. | Monslow, W. |
| Brooks, T. J. (Rothwell) | Haire, John E. (Wycombe) | Moody, A. S. |
| Broughton, Dr. A. D. D. | Hale, Leslie | Morgan, Dr. H. B. |
| Brown, George (Belper) | Hall, Rt. Hon. Glenvil | Morley, R. |
| Brown, T. J. (Ince) | Hamilton, Lieut.-Col. R. | Morris, Lt.-Col. H. (Sheffield, C.) |
| Bruce, Maj. D. W. T. | Hannan, W. (Maryhill) | Morris, P. (Swansea, W.) |
| Burden, T. W. | Hardman, D. R. | Morrison, Rt. Hon. H. (Lewisham, E.) |
| Burke, W. A. | Harrison, J. | Mort, D. L. |
| Butler, H. W. (Hackney, S.) | Hastings, Dr. Somerville. | Moyle, A. |
| Callaghan, James | Haworth, J. | Murray, J. D. |
| Carmichael, James | Henderson, Rt. Hon. A. (Kingswinford) | Nally, W. |
| Chamberlain, R. A. | Henderson, Joseph (Ardwick) | Neal, H. (Claycross) |
| Champion, A. J. | Herbison, Miss M. | Nichol, Mrs. M. E. (Bradford, N.) |
| Chetwynd, G. R. | Hewitson, Capt. M. | Nicholls, H. R. (Stratford) |
| Cobb, F. A. | Hobson, C. R. | Noel-Baker, Capt. F. E. (Brentford) |
| Cocks, F. S. | Holman, P. | Oldfield, W. H. |
| Coldrick, W. | Holmes, H. E. (Hemsworth) | Oliver, G. H. |
| Collindridge, F. | Horabin, T. L. | Orbach, M. |
| Collins, V. J. | Houghton, Douglas | Paget, R. T. |
| Colman, Miss G. M. | Hubbard, T. | Paling, Rt. Hon. Wilfred (Wentworth) |
| Comyns, Dr. L. | Hudson, J. H. (Ealing, W.) | Paling, Will T. (Dewsbury) |
| Cook, T. F. | Hughes, Emrys (S. Ayr) | Palmer, A. M. F. |
| Cooper, G. | Hughes, Hector (Aberdeen, N.) | Pannell, T. C. |
| Corbet, Mrs. F. K. (Camb'well, N. W.) | Hughes, H. D. (W'lverh'pton, W.) | Pargiter, G. A. |
| Corlett, Dr. J. | Hutchinson, H. L. (Rusholme) | Parker, J. |
| Cove, W. G. | Hynd, H. (Hackney, C.) | Parkin, B. T. |
| Crawley, A. | Hynd, J. B. (Attercliffe) | Paton, Mrs. F. (Rushcliffe) |
| Cripps, Rt. Hon. Sir S. | Irvine, A. J. (Liverpool) | Paton, J. (Norwich) |
| Crossman, R. H. S. | Irving, W. J. (Tottenham, N.) | Pearson, A. |
| Cullen, Mrs. | Isaacs, Rt. Hon. G. A. | Peart, T. F. |
| Daines, P. | Janner, B. | Perrins, W. |
| Dalton, Rt. Hon. H. | Jay, D. P. T. | Piratin, P. |
| Davies, Edward (Burslem) | Jeger, G. (Winchester) | Platts-Mills, J. F. F. |
| Davies, Ernest (Enfield) | Jeger, Dr. S. W. (St. Pancras, S. E.) | Poole, Cecil (Lichfield) |
| Davies, Harold (Leek) | Jenkins, R. H. | Porter, G. (Leeds) |
| Davies, Haydn (St. Pancras, S. W.) | Johnston, Douglas | Price, M. Philips |
| Davies, R. J. (Westhoughton) | Jones, Rt. Hon. A. C. (Shipley) | Pritt, D. N. |
| Davies, S. O. (Merthyr) | Jones, D. T. (Hartlepool) | Proctor, W. T. |
| Deer, G. | Jones, J. H. (Bolton) | Pryde, D. J. |
| Delargy, H. J. | Jones, P. Asterley (Hitchin) | Pursey, Comdr. H. |
| Diamond, J. | Keenan, W. | Randall, H. E. |
| Dobbie, W. | King, E. M. | Ranger, J. |
| Dodds, N. N. | Kinghorn, Sqn.-Ldr. E. | Rankin, J. |
| Driberg, T. E. N. | Kinley, J. | Reeves, J. |
| Dugdale, J. (W. Bromwich) | Kirkwood, Rt. Hon. D. | Reid, T. (Swindon) |
| Dumpleton, C. W. | Lang, G. | Ridealgh, Mrs. M. |
| Dye S. | Lavers, S. | Robens, A. |
| Robertson, J. J. (Berwick) | Strachey, Rt. Hon. J. | Wells, W. T. (Walsall) |
| Robinson, Kenneth (St. Pancras, N.) | Strauss, Rt. Hon. G. R. (Lambeth) | West, D. G. |
| Rogers, G. H. R. | Stubbs, A. E. | Wheatley, Rt. Hn. John (Edinb'gh, E.) |
| Ross, William (Kilmarnock) | Summerskill, Rt. Hon. Edith | White, H. (Derbyshire, N. E.) |
| Royle, C. | Swingler, S. | Whiteley, Rt. Hon. W. |
| Sargood, R. | Sylvester, G. O. | Wigg, George |
| Scollan, T. | Symonds, A. L. | Wilcock, Group-Capt. C. A. B. |
| Scott-Elliot, W. | Taylor, H. B. (Mansfield) | Willey, F. T. (Sunderland) |
| Shackleton, E. A. A. | Taylor, R. J. (Morpeth) | Willey, O. G. (Cleveland) |
| Sharp, Granville | Taylor, Dr. S. (Barnet) | Williams, J. L. (Kelvingrove) |
| Shawcross, C. N. (Widnes) | Thomas, D. E. (Aberdare) | Williams, Ronald (Wigan) |
| Shurmer, P. | Thomas, Ivor Owen (Wrekin) | Williams, Rt. Hon. T. (Don Valley) |
| Silkin, Rt. Hon. L. | Thomas, John R. (Dover) | Williams, W. T. (Hammersmith, S.) |
| Silverman, J. (Erdington) | Thorneycroft, Harry (Clayton) | Williams, W. R. (Heston) |
| Silverman, S. S. (Nelson) | Thurtle, Ernest | Willis, E. |
| Simmons, C. J. | Tiffany, S. | Wills, Mrs. E. A. |
| Skinnard, F. W. | Timmons, J. | Wilmot, Rt. Hon. J. |
| Smith, C. (Colchester) | Tolley, L. | Wilson, Rt. Hon. J. H. |
| Smith, Ellis (Stoke) | Tomlinson, Rt. Hon. G. | Wise, Major F. J. |
| Smith, H. N. (Nottingham, S.) | Turner-Samuels, M. | Woodburn, Rt. Hon A. |
| Smith, S. H. (Hull, S. W.) | Ungoed-Thomas, L. | Woods, G. S. |
| Snow, J. W. | Vernon, Maj W. F. | Wyatt, W. |
| Solley, L. J. | Viant, S. P. | Yates, V. F. |
| Sorensen, R. W. | Wallace, G. D. (Chislehurst) | Younger, Hon. Kenneth |
| Soskice, Rt. Hon. Sir Frank | Wallace, H. W. (Walthamstow, E.) | Zilliacus, K. |
| Sparks, J. A. | Warbey, W. N. | |
| Steele, T. | Watkins, T. E. | TELLERS FOR THE AYES: |
| Stewart, Michael (Fulham, E.) | Weitzman, D. | Mr. Popplewell and Mr. Wilkins. |
| Stokes, R. R. | Wells, P. L. (Faversham) |
| NOES | ||
| Amory, D. Heathcoat | Fleming, Sqn.-Ldr. E. L. | Lucas-Tooth, Sir H. |
| Assheton, Rt. Hon. R. | Fletcher, W. (Bury) | Lyttelton, Rt. Hon. O. |
| Astor, Hon. M. | Foster, J. G. (Northwich) | MacAndrew, Col. Sir C. |
| Baldwin, A. E. | Fox, Sir G. | McCallum, Maj D. |
| Barlow, Sir J. | Fraser, H. C. P. (Stone) | MacDonald, Sir M. (Inverness) |
| Baxter, A. B. | Fraser, Sir I. (Lonsdale) | Macdonald, Sir P. (I. of Wight) |
| Beamish, Maj. T. V. H. | Fyfe, Rt. Hon. Sir D. P. M. | McFarlane, C. S. |
| Beechman, N. A. | Gage, C. | Mackeson, Brig. H. R. |
| Bennett, Sir P. | Galbraith, Cmdr. T. D. (Pollok) | McKie, J. H. (Galloway) |
| Birch, Nigel | Galbraith, T. G. D. (Hillhead) | Maclay, Hon. J. S. |
| Boles, Lt.-Col. D. C. (Wells) | Gates, Maj. E. E. | Maclean, F. H. R. (Lancaster) |
| Boothby, R. | George, Maj. Rt. Hn. G. Lloyd (P'ke) | MacLeod, J. |
| Bossom, A. C. | Glyn, Sir R. | Macmillan, Rt. Hon. Harold (Bromley) |
| Bowen, R. | Gomme-Duncan, Col. A. | Macpherson, N. (Dumfries) |
| Bower, N. | Granville, E. (Eye) | Maitland, Comdr. J. W. |
| Boyd-Carpenter, J. A. | Gridley, Sir A. | Manningham-Buller, R. E. |
| Braithwaite, Lt.-Cmdr. J. G. | Hannon, Sir P. (Moseley) | Marlowe, A. A. H. |
| Bromley-Davenport, Lt.-Col. W. | Harden, J. R. E. | Marples, A. E. |
| Buchan-Hepburn, P. G. T. | Hare, Hon J. H. (Woodbridge) | Marsden, Capt. A. |
| Bullock, Capt. M. | Harris, F. W. (Croydon, N.) | Marshall, D. (Bodmin) |
| Butcher, H. W. | Harvey, Air-Comdre, A. V. | Marshall, S. H. (Sutton) |
| Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n) | Haughton, S. G. | Maude, J. C. |
| Byers, Frank | Head, Brig, A. H. | Medlicott, Brigadier F. |
| Carson, E. | Henderson, John (Cathcart) | Mellor, Sir J. |
| Challen, C. | Hinchingbrooke, Viscount | Molson, A. H. E. |
| Channon, H. | Hogg, Hon. Q. | Moore, Lt.-Col. Sir T. |
| Clarke, Col. R. S. | Hollis, M. C. | Morris, Hopkin (Carmarthen) |
| Clifton-Brown, Lt.-Col. G. | Hope, Lord J. | Morris-Jones, Sir H. |
| Cole, T. L. | Howard, Hon. A. | Morrison, Maj. J. G. (Salisbury) |
| Conant, Maj. R. J. E. | Hulbert, Wing-Cdr N. J. | Morrison, Rt. Hon. W. S. (Cirencester) |
| Cooper-Key, E. M. | Hurd, A. | Mott-Radclyffe, C. E. |
| Corbett, Lieut.-Col. U. (Ludlow) | Hutchison, Lt.-Cm. Clark (E'b'rgh, W) | Mullan, Lt. C. H. |
| Crookshank, Capt. Rt. Hon. H. F. C. | Hutchison, Col J. R. (Glasgow, C) | Neill, W. F. (Belfast, N.) |
| Crosthwaite-Eyre, Col. O. E. | Jarvis, Sir J. | Neven-Spence, Sir B. |
| Crowder, Capt. John E. | Jeffreys, General Sir G. | Nicholson, G. |
| Cuthbert, W. N. | Jennings, R. | Nield, B. (Chester) |
| Darling, Sir W. Y. | Joynson-Hicks, Hon. L. W. | Noble, Comdr. A. H. P. |
| Davidson, Viscountess | Keeling, E. H. | Nutting, Anthony |
| De la Bère, R. | Kerr, Sir J. Graham | Odey, G. W. |
| Digby, S. Wingfield | Kingsmill, Lt.-Col. W. H. | O'Neill, Rt. Hon. Sir H. |
| Dodds-Parker, A. D. | Lambert, Hon. G. | Orr-Ewing, I. L. |
| Dower, Col. A. V. G. (Penrith) | Lancaster, Col. C. G. | Osborne, C. |
| Dower, E. L. G. (Caithness) | Langford-Holt, J. | Peake, Rt. Hon. O. |
| Drayson, G. B. | Law, Rt. Hon. R. K. | Peto, Brig. C. H. M. |
| Drewe, C. | Legge-Bourke, Maj. E. A. H. | Pickthorn, K. |
| Dugdale, Maj. Sir T. (Richmond) | Lennox-Boyd, A. T. | Pitman, I. J. |
| Duncan, Rt. Hn. Sir A. (City of Land.) | Lindsay, M. (Solihull) | Ponsonby, Col. C. |
| Duthie, W. S. | Linstead, H. N. | Poole, O. B. S. (Oswestry) |
| Eccles, D. M. | Lloyd, Maj. Guy (Renfrew, E.) | Prescott, Stanley |
| Eden, Rt. Hon. A. | Lloyd, Selwyn (Wirral) | Prior-Palmer, Brig. O. |
| Elliot, Lieut.-Col. Rt. Hon. Walter | Low, A. R. W. | Raikes, H. V. |
| Erroll, F. J. | Lucas, Major Sir J. | Ramsay, Maj. S. |
| Reed, Sir S. (Aylesbury) | Stewart, J. Henderson (Fife, E.) | Wadsworth, G. |
| Renton, D. | Stoddart-Scott, Col. M. | Wakefield, Sir W. W. |
| Roberts, H. (Handsworth) | Strauss, Henry (English Universities) | Walker-Smith, D. |
| Roberts, P. G. (Ecclesall) | Stuart, Rt. Hon. J. (Moray) | Ward, Hon. G. R. |
| Robertson, Sir D. (Streatham) | Sutcliffe, H. | Watt, Sir G. S. Harvie |
| Robinson, Roland (Blackpool, S.) | Taylor, C. S. (Eastbourne) | Webbe, Sir H. (Abbey) |
| Ropner, Col. L. | Taylor, Vice-Adm. E. A. (P'dd't'n, S.) | Wheatley, Colonel M. J. (Dorset, E.) |
| Ross, Sir R. D. (Londonderry) | Teeling, William | White, J. B. (Canterbury) |
| Salter, Rt. Hon. Sir J. A. | Thomas, Ivor (Keighley) | Williams, C. (Torquay) |
| Sanderson, Sir F. | Thomas, J. P. L. (Hereford) | Williams, Gerald (Tonbridge) |
| Savory, Prof. D. L. | Thorneycroft, G. E. P. (Monmouth) | Willoughby de Eresby, Lord |
| Scott, Lord W. | Thornton-Kemsley, C. N. | Winterton, Rt. Hon. Earl |
| Shepherd, W. S. (Bucklow) | Thorp, Brigadier R. A. F. | York, C. |
| Smiles, Lt.-Col. Sir W. | Touche, G. C. | Young, Sir A. S. L. (Partick) |
| Smith, E. P. (Ashford) | Turton, R. H. | |
| Spearman, A. C. M. | Tweedsmuir, Lady | TELLERS FOR THE NOES: |
| Spence, H. R. | Vane, W. M. F. | Commander Agnew and |
| Mr. Studholme. |
§ Resolution to be reported Tomorrow.