HL Deb 29 April 1947 vol 147 cc144-6

2.52 p.m.

VISCOUNT ELIBANK

My Lords, I beg to ask the question standing in my name.

[The question was as follows:

To ask His Majesty's Government, what is the estimated average aggregate annual loss to the Treasury in Income Tax paid by companies connected with the nationalized industries, i.e., coal, transport, electricity and gas; and further, how do the Government propose to make good this loss of revenue.]

THE MINISTER OF CIVIL AVIATION (LORD NATHAN)

My Lords, the statutory bodies to which the nationalized industries are transferred will be liable to Income Tax on their profits, like any ordinary trading concern. Your Lordships will remember that Section 47 of the Coal Industry Nationalisation Act, 1946, provides that: Nothing in this Act shall be deemed to exempt the Board from liability for any tax, duty, rate, levy or other charge whatsoever, whether general or local.

VISCOUNT ELIBANK

May I ask—arising out of that answer—whether the same principle is to apply to all three industries as in the case of the coal industry?

LORD NATHAN

A clause in similar terms appears in the Transport Bill and in the Electricity Bill.

VISCOUNT SWINTON

Arising out of that reply, I would point out that the noble Lord has told us what are the provisions of the Act, of which indeed I think we were well aware. I rather gathered that the import of the question was whether the Treasury were going to make or lose money out of this transaction. Is the noble Lord in a position to say what the prospects are of either getting more or getting less from the coal industry?

LORD NATHAN

I scarcely think that arises on the question on the Paper.

VISCOUNT SWINTON

With great respect, I would point out that the question is this: What is the estimated average aggregate annual loss to the Treasury? In common English, that means: do the Government estimate they will make or lose—

A NOBLE LORD

In Income Tax.

VISCOUNT SWINTON

In Income Tax, certainly. The question I asked—which was indeed the question on the Paper—is: Have the operations of the Coal Board (which has to pay Income Tax if it makes a profit) proceeded sufficiently far to indicate whether it has to pay more or less Income Tax than did that industry under private enterprise?

LORD NATHAN

The position is as follows. After nationalization these industries will stand in regard to Income Tax on exactly the same footing as they did before or would have done had there been no nationalization. As to whether the future will show a profit, or a greater or less profit, or a loss, or a greater or less loss, than was the case before, or might have been the case had there been no nationalization, that is purely a matter of speculation upon which there is no data at present available upon which to form a judgment.

LORD REA

Is it not a fact that, prior to nationalization, the Government received Income Tax from collieries making profits, and that no rebate was made to those that suffered losses? If they are now all aggregated, is it not a fact that the losses will be deducted from the profits before Income Tax becomes payable, and therefore, there is bound to be a considerable loss to the Revenue?

LORD NATHAN

The question of the out-turn must really await some experience on those matters, until accounts have been prepared and their general effect can be surveyed.

VISCOUNT ELIBANK

Am I to understand from the noble Lord's answer that the Government did not consider at all what the effect of the nationalization of these industries would be upon Income Tax? Because the noble Lord said it was all a matter of speculation. Did the Government merely speculate on this question before they entered into it?

LORD NATHAN

I have the feeling that the noble Viscount has raised a broad question of policy in contradistinction to the question of fact which he raised in his question. My recollection —and I speak only from my recollection—is that the very point now put by the noble Viscount was considered and discussed in the course of the debates on the Coal Bill.

LORD TEVIOT

Now that the word "profit" has been mentioned, I do hope that the Government will see that nobody makes any profit, because I understand that that was one of their major policies —that no profit was to be made by anybody and that everybody should work. only for the State. I hope that that very fine sentiment will remain when they are considering these matters.