HC Deb 29 October 1919 vol 120 cc723-4W
Captain BAGLEY

asked the President of the Board of Trade whether any fall in prices has resulted directly from the reduction in the Excess Profits duty; and, if he has not already investigated the matter, whether he will take steps under the Profiteering Act or otherwise to ascertain who has benefited by that reduction?


The question of the effect of the Excess Profits Duty on prices involves economic considerations with which it is impossible to deal adequately in answer to a question, but, on the assumption that the lowering of the rate of this tax should be reflected in some measure in prices, it appears probable that in some cases increased costs of production arising from increased cost of coal, machinery, repairs, oil, etc., increased wages and decreased hours would have fully balanced the reduction in tax. In such cases the effect of the reduction may have been to prevent a rise in price. There are a number of Committees now investigating prices under the powers conferred by the Profiteering Act, but it is difficult for them to investigate the point raised as they were not established before the tax was reduced.