§ Mr. THOMASasked the Chancellor of the Exchequer (1) whether it was the intention of the- Government in levying excess profits taxation upon working-class members of co-operative societies that the taxation payable should increase directly as the prices of commodities increase and with the result that the workers are doubly taxed, that is to say, both on the increased cost of living and also on the saving effected by their particular trading method, and that the incidence thereof should fall in such a manner as to make societies liable for taxation even in the event of the rate of dividend distributed being 40 per cent, lower than that paid before the War; whether, having regard to the hardships thus occasioned to the working classes of the country, he will give instructions that the Excess Profits Tax shall not be levied in such cases; and (2) whether he is aware that the Plymouth Co-operative Society, with a membership of 50,000, mainly composed of the working classes, has made great efforts to reduce the price of commodities to their members in order that the increase in the cost of living should be minimised; that they have now received a demand for £14,000 excess war profits for the year ending June, 1915, and appear on this basis to be liable for a further demand of £20,000 for the period ending June, 1916, and that for the year ending June, 1917, upon the distribution of a dividend less than that paid previous to the War this tax will amount to £40,000; and, having regard to the statement of the Chancellor of the Exchequer that dividends paid by co-operative societies were of the nature of savings and not profits, he will take the necessary steps to see that the Treasury withdraws this demand?
§ Mr. McKENNAI am aware that the society mentioned has received a demand as stated for Excess Profits Duty for the year ended 30th June, 1915, and that a liability for the year next ensuing will shortly mature. There is no necessary connection between the prices of commodities and the margin of profit or discount which alone comes within the scope of the Excess Profits Duty. The duty in its application to co-operative societies attaches to the increase in the surplus per member, and that increase, which is not necessarily proportionate to any change in the rate of 2485W dividends, affords the truest index of the capacity of a society to make a special contribution to the revenue such as the exigencies of the present time demand.