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Tobacco Trading Services

Volume 436: debated on Wednesday 23 April 1947

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asked the President of the Board of Trade why it is estimated that the sales of Tobacco Trading Services during 1947–48 will be less than half the cost of purchases, etc.; whether an inflated price is paid for the tobacco or an uneconomic price charged for it; and who benefits from the proposed £11,325,000 subsidy.

The receipts and payments shown under Tobacco Trading Services in the estimates for 1947–48 do not relate to the same goods. Receipts are partly in respect of tobacco purchased in earlier years and payments are for tobacco not all of which is expected to be realised during the current year. In these circumstances my hon. Friend will appreciate that neither of the alternatives in the second part of his Question necessarily arises and that it would not be correct to refer to the excess payments as a subsidy. If my hon. Friend will look at the Vote of Credit Appropriation Accounts for prior years he will see that they show a considerable excess of receipts over payments. The figures given in the estimate for 1947–48 relate to tobacco from three sources, Greece, Turkey and the United States. I am sending my hon. Friend a statement giving details of these transactions from which he will see that since the estimate was prepared the incidence of payments and the expectation of receipts have materially changed, with the result that the excess expenditure in the year is likely to be very considerably less than £1,325.000.