§ 2. Dr. Brayasked the Chancellor of the Exchequer by how much profits and earned incomes, respectively, have increased since this time last year.
§ Mr. MaudlingI regret that figures for the first quarter of 1964 are not yet available. Even when they are known, comparisons with the corresponding quarter of 1963 would be misleading because of the exceptionally severe weather at the beginning of last year. The figures for the last quarter of 1963 were published with a commentary in the Economic Report, 1963.
§ Dr. BrayIs the Chancellor aware that, quite apart from the first quarter, 235 companies declared their results in April, and this week the Economist reported that their profits show an increase of over 15 per cent. on last year? [HON. MEMBERS: "Hear, hear."] Does the right hon. Gentleman really think that with profits increasing like this, and with no step on the part of the Government to introduce any control of profits by a Profits Tax, we have a firm basis for an incomes policy?
§ Mr. MaudlingI think that this is the misunderstanding. One must look at profits over a period of years, because they fluctuate in both directions. In 1961–62, when they were falling, it was not then suggested, I think, that we should reduce taxation.
§ Mr. Peter EmeryDoes not my right hon. Friend agree that it is not only 1961–62, but that since 1958 industrial profits have fallen as a unit from a position of about 15 to 8? Would it not, therefore, be completely understandable that industry should attempt to get back to the level of profitability it knew in 1959?
§ Mr. MaudlingIt all shows that much depends on the base year one takes, but the simple fact is that one must assume that sometimes profits should rise faster than wages because, at others, they are falling when wages are going up.