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Company Reserves

Volume 465: debated on Tuesday 31 May 1949

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asked the Chancellor of the Exchequer whether the £1,215,000,000 profits which, as stated by him, had been put to reserve by companies, was a gross estimate prior to provision for taxation, or whether it represented the residue after allowance for taxation.


asked the Chancellor of the Exchequer how much of the £1,215,000,000 stated by him as having been put to extra reserve by companies last year represented provision for taxation.

I would refer the hon. Gentlemen to Table 6 of the White Paper on National Income and Expenditure (Cmd. 7649).

If the Chancellor had wanted to give a really factual picture would he not have taken the lesser figure rather than the larger?

No, Sir, because the whole of the contents of the larger figure was, in fact, achieved by the price of the articles sold.

Is it not clear after all this that the Chancellor's general insinuation in his Second Reading speech on the Finance Bill, that profits were largely responsible for high prices, was, to say the least of it, undesirable and dishonest?

The noble Lord must learn to ask courteous questions if he wishes for replies.

Of course, I shall try to match my question to the courtesy of the replies we receive. Does the right hon. and learned Gentleman consider the sum of £500 million net which was actually put to reserve to be excessive in view of the demands that are to be made on industry for re-equipment?

Of course, one must divide it up into different industries. In some cases it may have been excessive and in others not. It is not the same in every industry. It varies. Some make much bigger profits than others. What I stated was that this large volume of profits could enable some industries in some articles to reduce the export price.

From the right hon. and learned Gentleman's previous answer to my right hon. Friend the Member for West Bristol (Mr. Stanley) are we to understand that when the right hon. and learned Gentleman said "frightfully high" what he meant was "very fair"?

I am afraid not, because I consider that they are in some cases frightfully high.

Do not the figures of profits show that they are approximately 16 per cent. of the turnover value of a large percentage of public companies?

As the right hon. and learned Gentleman criticised my method of asking a question of him through you, Mr. Speaker, and my use of the two adjectives "undesirable" and "dishonest," may I now ask him if he is aware that they were applied by him to an hon. Member on this side of the House in the Debate.