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Determination Of Profits (Crown Assets)

Volume 411: debated on Tuesday 29 May 1945

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asked the Chancellor of the Exchequer whether he is aware that the Society of British Aircraft Constructors have entered into an agreement with the Ministry of Aircraft Production whereby one-eighth of the value of Crown assets provided for companies by the Ministry of Aircraft Production, when a rental is not charged, is allowed to rank as capital employed for the determination of profit; and, now much of the cost of such machinery the firms in the Society of British Aircraft Constructors are entitled to rank as capital employed for the determination of profit if a rental is charged.

The arrangement under which one-eighth of the value of Government-owned assets is allowed to rank as capital employed for profit determination purposes is not peculiar to the Society of British Aircraft Constructors, but is of general application. The intention is that contractors shall in effect receive a management fee for the handling of Government-owned assets. The one-eighth allowance is given irrespective of whether a rental is charged, and the answer to the second part of the Question is, therefore, that it applies to the whole of the Crown assets in use for Government purposes by the society.