HC Deb 17 March 1964 vol 691 cc1160-1
6. Mr. Jay

asked the Chancellor of the Exchequer how much higher total revenue from Income Tax and Profits Tax on companies would be in the present year if the same proportion of companies' profits were paid in these taxes as in the year 1952–53.

Mr. Boyd-Carpenter

The tax, including foreign tax, on companies' income of 1951, which was assessable, broadly speaking, for 1952–53, was about 55 per cent. of their income after deducting capital allowances. If the same proportion were payable of their income of 1962, their tax bills would be increased by about £270 million.

Mr. Jay

Is not that rather a remarkable figure, which shows at least one source to which the Government could look if they should need additional revenue in the future?

Mr. Boyd-Carpenter

It also shows the great expansion in the economy that has taken place under this Government. If one compares the growth of company profits with the greatly increased growth of fixed capital formation, it will also be apparent how wise we have been not to overtax companies.

Mr. Jay

But does this figure show any expansion in the economy? Does it not merely show that companies are paying a lower proportion of profits in taxation?

Mr. Boyd-Carpenter

Not when the right hon. Gentleman ponders on the remark I made about the great growth, far greater than that in profits, in fixed capital formation.

Sir C. Osborne

Would my right hon. Friend resist the right hon. Gentleman's suggestion to take away all the extra profits made by business firms, as there will be no encouragement for people to be efficient if he does so?

Mr. Boyd-Carpenter

In principle, it is a good idea to reject suggestions made by the right hon. Gentleman.