§ I revert to this year's main theme—the need to give a real boost to production. Let us launch a drive to show the world that our highly concentrated industry and our developing agriculture are taking on a new lease of competitive power, life and hope. Already I have announced the re-introduction of the initial allowances. Now for bigger matters.
§ It is clear that we should, in a great industrial society, look ahead for a period longer than one year. We must be in deadly earnest in this struggle for overseas markets; we must go into it as lightly burdened and as nimbly competitive as we can. Last year we balanced our payments. This year we can continue to make way only if we succeed in giving a real fillip to our production. A work of art must have a theme: a Budget must hold out a prospect.
§ Each time that I have discussed with the leaders of industry how best to help developing companies and exporters, they have said, "You must relieve the general burden of taxation which falls upon us. Artificial devices are of little value." Schemes of export subsidies are generally rejected as unfair. I have asked those who speak for industry and commerce whether our banking and financial system provides adequate finance for our exporters. On the whole, I believe that it does, and that if there is a problem here it is rather one of making more 59 widely known the financial facilities that already exist.
§ I must honestly say after going into this in the spirit in which I opened my speech with an intense desire to help export and development—that I found that everyone, including the T.U.C., comes back to the incidence of the Excess Profits Levy on export and development. I explained last year that this levy had to be introduced as a purely temporary measure to deal with the exceptional circumstances of a period of re-armament. I do not propose any changes in the levy as it now exists, and as long as it exists, except to redeem the promises made about minerals and investment holding companies.
§ When we proposed a tax on excess profits it was on the basis that the rearmament programme was to be at a high rate for a relatively short period—about three years—at the end of which emergency period it would tail off. Now we must expect re-armament to go on at not quite so high a rate for a long time. This change in the impact of defence diminishes the justification for a continuing Excess Profits Levy. Taking into account this change, and the effect of the levy on exporting and developing businesses, I have reviewed the period for which it must go on.
§ Now be it noted that we shall get £100 million from this tax in the coming year and rather more than £100 million in the year after, that is, in 1954–55. Before the next Budget, and with still a year of yield from the levy—that is, in 1954–55—it should be possible to make a full review of the level of taxation and of industrial taxation in particular in the light of the Royal Commission's Report. So, after much thought, I have come to the conclusion that the levy should be ended with effect from 1st January, 1954.
§ I am sure that it will be an encouragement to industry to know that a definite term has been fixed for the operation of this emergency tax. Following the precedent set in 1946 for the ending of the war-time Excess Profits Tax as from the end of that year, the terminating legislation will be included in this year's Finance Bill.