TAXATION OF PROFITS AND INCOME (ROYAL COMMISSION) (Hansard, 27 July 1950)

§ The Prime Minister (Mr. Attlee)
As my right hon. and learned Friend the Chancellor of the Exchequer stated in reply to the Debate on the Second Reading of the Finance Bill on 16th May, we have been making the preparatory arrangements for the wider inquiry into taxation which my right hon. and learned Friend stated in his Budget Speech of 1949 would follow the present Committee under the Chairmanship of Mr. Millard Tucker which is inquiring into the computation of trading profits.
Although my right hon. and learned Friend's statement related primarily to the taxation of industry and such matters as risk bearing and incentive which have been canvassed largely from the point of view of industry, the question is equally one which affects the ordinary wage and salary earner: directly because of the impact of P.A.Y.E. on his wages or salary and indirectly because it is of vital import- 692 ance to all of us that there should be an adequate supply of capital for industry to ensure the maintenance of full employment and progressively improving standards for wage earners and the community as a whole. His Majesty's Government have, therefore, come to the conclusion that the inquiry should be a wide one covering the incidence and effects of all the taxes on income and extending to the taxation of wages and salaries as well as of business profits.
I have therefore recommended to His Majesty the setting up of a Royal Commission with terms of reference to the broad effect that it would inquire into the whole of the present system of taxation of profits and income, with particular reference to the taxation of business profits and the taxation of salaries and wages keeping in mind the need for maintaining the revenue. The precise terms of reference and the composition of the Royal Commission will be announced in due course.

§ Mr. Oliver Lyttelton
May I ask the Prime Minister if the Tucker Committee will make its report, or is it intended that the Royal Commission should supersede the Tucker Committee? We should hope that the Tucker Committee would first present its report.

§ The Prime Minister
Yes, it is proposed that the Tucker Committee should make its report, and the Royal Commission will take that report into consideration.