Skip to main content

National Finance

Volume 465: debated on Tuesday 24 May 1949

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Purchase Tax


asked the Chancellor of the Exchequer if he will make a statement on the reasons for the delay in taking to the courts the refusal of some manufacturers of model aircraft accessories to charge Purchase Tax on goods sold to the public under the provisions of the Finance Act, 1948, which delay is placing firms which accept the Treasury interpretation of the law at a disadvantage in relation to their competitors.

It has been necessary to agree a comprehensive list of the products of the industry to be made the subject of this "test" action. Agreement has now been reached and a Declaratory Judgment of the High Court will be sought in the near future.

Tax Repayment (Legal Decision)


asked the Chancellor of the Exchequer if he has now come to a conclusion on the observations of Mr. Justice Vaisey on 16th March in Sebel Products Limited v. Commissioners of Customs and Excise; and whether he will indicate his future policy with regard to the retention by the Crown of tax paid under mistake of law.

Yes, Sir. The judge expressed the view that there was no reason why, in appropriate cases, the Crown should not refuse to repay money paid voluntarily under a mistake of law, but gave his reasons for thinking that it was a defence that ought to be used by a Government Department with great discretion. The Government endorse this view, which indeed accords with the practice generally followed by Departments in the past, and the Treasury is issuing a circular to ensure that the practice of Departments continues to conform with it in the future.

Will the right hon. and learned Gentleman review the collection by the Commissioners of Customs and Excise of Purchase Tax on car radios, which was collected without any statutory sanction whatsoever? Will he see that that question is reviewed in due course?

I do not think it is necessary to review that again. As the hon. Member knows, it was reviewed many times.

Gold Payments (Switzerland)


asked the Chancellor of the Exchequer what amounts of gold have been paid to Switzerland under the Anglo-Swiss Payments Agreement in 1949.

As this drain on gold arises from the temporary movement of sterling, due to people purchasing Swiss francs for their holidays, would not it be right and proper to offer to modify the Anglo-Swiss Agreement so that the immediate balance was not taken into account, but purely the final balance over a period of time?

Belgian Exports (Sterling Payments)


asked the Chancellor of the Exchequer whether the recent decision of the Belgian Government that Belgian exports to certain countries outside the sterling area can be paid for in sterling will, under the terms of the Anglo-Belgian Payments Agreement, entail any loss of gold to this country.

Our present arrangements with Belgium provide for a limited amount of sterling transfers from third countries. These transfers do, of course, add to the amount of the deficit which has to be settled in gold. The arrangements expire on 30th June next.

Can the Chancellor of the Exchequer say whether in all cases this sterling comes from current accounts and not through releases from blocked sterling balances.

Income Tax (Allowances)


asked the Chancellor of the Exchequer whether, since many individuals do not understand what claims they are entitled to set against their taxation, he will have printed prominently on each Income Tax notice words drawing attention to the fact that there is at every taxation office an adviser who will advise on what they are entitled to claim in order to reduce their tax where justified.

Every taxpayer is given a simple statement—with both his return form and his coding notice—which explains the allowances and reliefs available to him. Also the return form, the coding notice and the assessment notice invite him to call at the tax office if he wants any information. I do not think any extension of these arrangements is necessary.

While I agree that a great deal of information and explanation is given on the notices, much of which is very difficult to understand, would it not be helpful if there was added to this form a notice reminding the bewildered victim that he has a friend in the tax office who is on his side?

As I have said, he is invited to call at the tax office if he wishes for any elucidation; and in one week after the 5th February, 250,000 persons availed themselves of that invitation.

Why is it that the Scottish notice of assessment contains a form of appeal and the English one does not?

Perhaps the hon. and learned Member will put that question on the Order Paper.

Referring to the original reply, will my right hon. and learned Friend bear in mind that if the Opposition had had their way last night nobody would get any information at all.

International Loans And Gifts


asked the Chancellor of the Exchequer the total amount in gifts and loans Great Britain has received since August, 1945, to date, from other countries; and the total amount in loans and gifts which Great Britain has made to other countries during the same period.

From August, 1945, to date, the United Kingdom has received from other countries gifts and loans to the value of £1,278 million. In addition, E.R.P. aid to the United Kingdom amounted to £275 million up to the 21st May, 1949, and drawing rights exercised by us under the Intra-European Payments Agreement were £7½ million. During the same period the sum of £885 million was made available to other countries by the United Kingdom and drawing rights exercised on us by other countries totalled £41 million.

Having due regard to our financial position, does not my right hon. and learned Friend think that these figures reveal that no nation in the world has been more generous to other countries than has this country, and will he see to it that in future publications what we have done for the world is given equal publicity with what America is supposed to have done on our behalf?

I think that the American people have been extremely generous in their assistance to the world, and we have done our best to help others, too.

Will the right hon. and learned Gentleman bear these figures in mind and call attention to them when he and his colleagues draw comparisons between the post-war Government after the first war and the post-war Government after the last war?

Certainly, Sir. We bear everything in mind when we make such comparisons.

Gold Exports (Price)


asked the Chancellor of the Exchequer the amount of gold exported from the sterling area to the United States of America during 1948; and the average amount paid per fine ounce.

I regret that I cannot disclose details of the operations of the Exchange Equalisation Account. All our gold transactions with the United States are on the basis of the official price of 35 dollars per fine ounce.

May I ask my right hon. and learned Friend whether the market price today is not £24 per fine ounce, and will he explain to the House why it is that there is such secrecy over this matter? The amount of gold shipped used to be announced in all publications before the war. It was stopped during the war, but now we are supposed to be at peace why should we not know the truth?

Because it has never been customary to disclose the operations of the Exchange Equalisation Account.

I am not talking about exchange equalisation fund. I am asking a perfectly simple question; what amount of gold is exported from the sterling area? That was always published before the war, and why should not we know now?

I am afraid, as regards the sterling area, we are not in control of the export of gold. I am not responsible for the gold that goes from other parts of the sterling area.

If I put down a Question which my right hon. and learned Friend can answer, will he endeavour to do so?

Prices And Profits


asked the Chancellor of the Exchequer whether, in view of the failure of the Federation of British Industries and associated organisations to produce any effective plan for price and profit decreases, as requested by him in February of last year he will now announce what steps are to be taken to enforce early reductions of swollen prices and profits

As I told the hon. Member on 22nd February, the request for a voluntary reduction of prices and so of profits was addressed to the country generally. I said that although it was not possible to place any numerical evaluation upon the response to my request I had had evidence of many price reductions resulting from it and of higher costs absorbed into prices without increase. On 24th February I circulated the text of an exchange of letters between the Federation of British Industries, the Association of British Chambers of Commerce, the National Union of Manufacturers and myself, indicating that industry was prepared to co-operate for one more year in avoiding any general increase in the level of dividends. I do not at present propose to add anything to what I said in the Debate on the Second Reading of the Finance Bill on 18th May, but I shall, of course, continue to watch the position with keen interest.

As my right hon. and learned Friend the Chancellor of the Exchequer now agrees with me that profits are "frightfully high"—to use his own expression—that they drag up prices with them, and that the Federation of British Industries has done nothing effective whatsoever, does not he think that his strong and vigorous words should now be matched with equally strong and vigorous action?

I am afraid that as I do not agree with the hon. Member's analysis of what I think, I do not agree with what he thinks I should do.

Has the attention of the right hon. and learned Gentleman been drawn to the statement made yesterday by the Postmaster-General, that a prudent business man when he sees his profits declining should immediately—as has been done with the Post Office—increase the cost to the consumer; and does he agree that that example set by a Government Department is one which a prudent business man outside ought to follow?

It depends very much on the circumstances. If he finds that he is charging very much less than currently is charged for other goods it may be advisable for him to increase his prices.

Company Reserves


asked the Chancellor of the Exchequer how much was last year put to extra reserve by companies after allowing for taxes.

As the amount reserved for taxation is not available for the reduction of prices, was it not misleading of the right hon. and learned Gentleman the other day to include it in the amount so available?

Of course, it is available for a reduction of prices, because if it had not been earned there would not have been any tax to be paid.

If the Chancellor disagrees with what I said on the last Question, which is also relevant to this Question, would he oblige by reading his Second Reading speech on the Finance Bill last week?

Does not the right hon. and learned Gentleman think that his statement that £1,215 million profits were available for price reduction would, in the light of what he has just said, possibly tend to mislead one or two people?

I should have thought not. The whole of these extra profits came out of the prices for which goods were sold. If those prices had been reduced by whatever the sum was, there would have been £1,215 million less profits and, therefore, there would have been £700 million less tax to be paid on the profits. The tax was paid because the profits were earned.

Could the right hon. and learned Gentleman tell us how he would have raised that £700 million if that tax had not been paid?

Had prices been reduced it might not have been necessary to have so disinflationary a Budget.

The Chancellor of the Exchequer said, "By whatever sum prices would have been reduced." No doubt before he made the statement in his speech he had got some estimate as to how much they could have been reduced. Will he now tell the House and the country by how much they could have been reduced?

I have no such estimate and naturally should not have. What I did say was that there was in some cases a surplus which could have been used for price reduction.

If prices had been reduced not only to the extent of eliminating profits, but also to the extent of producing losses, would that have been a good thing in the right hon. and learned Gentleman's opinion?

It is very difficult to say. If the hon. and learned Member will give me an exact instance of what he is thinking, I should be able to answer the question.

Will the right hon. and learned Gentleman be a little more consistent in this matter of profits by backing up his strong views with a little more resolute action?

I consider that taxation up to 60 per cent. of profits is quite resolute action.

How does the right hon. and learned Gentleman apply his peculiar and tortuous argument to Purchase Tax in this connection?

I am afraid that that has nothing to do with the point we are now discussing.

Does not the right hon. and learned Gentleman think that he was guilty of making a highly Jesuitical statement?