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National Finance

Volume 465: debated on Thursday 2 June 1949

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European Economic Co-Operation (Payments)

61.

asked the Chancellor of the Exchequer what amounts of gold and dollars have been paid to the Organisation of European Economic Co-operation countries each month from the inception of the Intra-European Payments Agreement.

I will, with permission, circulate the figures in the OFFICIAL REPORT.

Can my hon. Friend give me something more intelligible? I want to know the answer particularly. Can he say if the gold was sent in bullion and not in coin, what amount was involved, and what was the rate per fine ounce?

The figures which I propose to circulate are perfectly intelligible, and they show, as I think the House knows, considerable payments to Switzerland and Belgium in particular. The other points which my hon. Friend raised are not in his Question, and perhaps he will give notice of them.

Surely I am entitled to know what amount is involved, and surely my hon. Friend can tell me that, as I wish to do a bit of propaganda on this subject.

Following are the figures:

GOLD AND DOLLAR SETTLEMENTS IN CONNECTION WITH PAYMENTS AGREEMENTS WITH O.E.E.C. COUNTRIES
Paid in£'000
BelgiumSwitzerlandBizone
1948
October2,5005003,161
November500
December
1949
January2,700801,502
February1,700288
March1,2311,496
April2,2601,696
May1,7921,015

Level Of Profits (White Paper)

62.

asked the Chancellor of the Exchequer whether he will publish a White Paper giving particulars of the level of profits made during the years 1946, 1947 and 1948, respectively, by all such undertakings as have a capital value of £100,000 or more.

In view of the fact that since the Prime Minister made his appeal to both sides of industry headlines have appeared in the Press indicating that every kind of trade union is making a request for higher wages, would it not be in the nature of redressing the balance to make this information also available.

General information about the level of profits year by year is given in the National Income White Paper. That is the best form of making it available and the most illuminating from the point of view of the public.

Is it not a fact that wages have risen three times as much as profits during the period under review?

I do not think so. There has also been a rise in the productivity of labour.

Is not that one of the reasons why we should know what are the profits, so that we can compare them with the rising wages?

Is it not the case that whereas dividends are declared only once a year, wages have risen as often as once a month.

Defence Contribution (Assessments)

66 and 67.

asked the Chancellor of the Exchequer (1) whether his attention has been called to the decision by Mr. Justice Atkinson in the King's Bench Division on 24th March, that compensation rent under Section 2 of the Compensation Defence Act, 1939, is not assessable for Defence Contribution insofar as those taxpayers who were wrongly assessed by revenue officials are penalised whilst others who challenged the decision of these officials have been able to avoid payment on an incorrect assessment; and whether he will make an ex gratia repayment to those who have suffered in this connection;

(2) whether he is aware that by the decision in G.I.R. v. Buxton Palace Hotel Limited on 24th March, 1948, by Mr. Justice Atkinson in the King's Bench Division that compensation rent under Section 2 of the Compensation Defence Act, 1939, is not assessable for National Defence Contribution, but that despite this judgment, the Board of Inland Revenue have stated that they are unable to agree to this decision being applied retrospectively to any cases which in their view are for technical reasons not regarded as under appeal; and, in view of the obscurity of the legislation involved, what steps he will take to ensure that the present attitude of the Board of Inland Revenue is reconsidered.

In general, an assessment to tax which has become final and conclusive can be re-opened only under the provisions of Section 24 of the Finance Act, 1923, which deals with certain cases of error and mistake and is applied to Profits Tax—formerly called National Defence Contribution—by Section 35 and the Fifth Schedule to the Finance (No. 2) Act, 1945. Under these provisions a judicial decision has no retrospective effect in relation to assessments which have become final and conclusive under the law, and the cases to which the hon. Member refers have accordingly been correctly dealt with. My right hon. and learned Friend cannot accept the suggestion that an exgratia payment should be made to those taxpayers who did not avail themselves of their statutory right of appeal on the point.

Gold (Price)

68.

asked the Chancellor of the Exchequer why gold is being sold to the United States of America for approximately £8 15s. the fine ounce when the world market price is £24.

The United Kingdom sells monetary gold at the official United States Treasury price of 35 dollars per fine ounce, and this is in accordance with our adherence to the International Monetary Fund. To sell monetary gold at a higher price would be contrary to our obligations, as members of the Fund, directed to maintaining orderly currency arrangements.

Will my hon. Friend explain what he means by "monetary gold"; will he also say why gold is sold in India at about £24 per fine ounce, whereas yesterday it was 118 rupees 15 annas per tola, which is about £23 5s. per fine ounce; and will he explain the difference between monetary gold and gold? Or is there something phoney about it?

Well, gold which is sold to monetary authorities, including the U.S. monetary authorities, is naturally classed as monetary gold. The price which the United States monetary authorities pay for gold is generally regarded as the ruling world price for gold.

Will the hon. Gentleman, in pursuance of this policy, not reconsider reopening the free gold market in Hong Kong?

Is not my hon. Friend aware that, leaving out India as a restricted market, in many markets gold is sold at at least £17 per fine ounce? Why do we put up with this restriction? Why is it allowed to go on? Will he explain it to the House?

Of course, the price of gold in those markets to which my hon. Friend refers has no relevance to our obligations to the International Monetary Fund.

Well, who made this phoney arrangement? Can I not have an answer? Why is it that the price is kept down?

Our adherence to the International Monetary Fund and the obligations involved was approved by this House.

Is it quite clear then that there is no question here of a "bankers' ramp"?

Gold (Dominion Exports)

69.

asked the Chancellor of the Exchequer whether he will state the amount and value of gold exported from each of the British Dominions within the sterling area for the year ended 31st December, 1948.

The Government are not responsible for exports of gold by other Commonwealth countries.

I am aware of that, but has not my hon. Friend and his Department any knowledge of this matter? They seem to be vitally interested in any materials other than gold. Apparently we are not to know anything about gold. What is all this secrecy about? Can we be told?

There is no secrecy, but it is not the responsibility of the United Kingdom Government to answer questions about exports of gold by other countries. I can tell my hon. Friend that there was a considerable export of gold, of over £100 million, from South Africa to the United States during this period.

I have no doubt that it is not their responsibility. I asked whether my hon. Friend knew and whether he would tell the House. I was not interested in learning that it was not his responsibility. Why cannot he tell us the amount. If he does not know the figure let him say so.

Could the hon. Gentleman say whether this is one of those cases where the gentleman in Whitehall does not know the right answers?

On a point of Order. Can we have questions on Ministers' knowledge as distinct from their responsibility? We might learn something useful about the Derby winner that way.

Is not the Economic Secretary impressed by this demand in the Questions of the hon. Member for Ipswich (Mr. Stokes) for greater profits for sellers of gold?

On a point of Order, Mr. Speaker. Are you not calling Question No. 70?

Defence Services (Cost)

73.

asked the Chancellor of the Exchequer how he arrives at the calculation contained in the booklet "The Budget and Your Pocket," that the cost of defence is equal to an outlay of 22s. 6d. a week for every household in the country.

The figure of 22s. 6d. a week is reached by dividing the Defence Estimate for 1949–50, of £760 million, by 13 million, the estimated number of households in Britain.

Was the same method of calculation used in this case as the Minister of Defence used when he estimated that the cost was £15 per head?

I do not know. This is the simple average of the total expenditure over the number of households in the country. It does not, of course, mean that every household is paying that amount.

Will the Economic Secretary inform the Chancellor that if he keeps on his Budget line, a lot of people will have no need for pockets.

Messrs Vickers Limited (Bonus Shares)

74.

asked the Chancellor of the Exchequer why Treasury permission has been given to Messrs. Vickers Limited to capitalise reserves to the extent of over £6 million and to distribute that sum in the form of fully-paid bonus shares to the company's stockholders.

The Capital Issues Committee recommended consent and the Treasury acted on that recommendation.

Even though this sort of thing is technically permissible is it not morally unjustifiable, fully inflationary, and contrary to all that the Chancellor has been saying over the last 18 months?

Post-War Credits

75 and 76.

asked the Chancellor of the Exchequer (1) if he will give an estimate of the sum of money involved in any one year in paying to widows such post-war credits as pass to them on account of their husband's estates;

(2) if he will give an estimate of the sum of money involved in any one year in the payment of post-war credits attaching to the estates of deceased persons at the time such estates are wound up.

Will not my right hon. Friend take some steps to make the information available, in order that we may know what sum of money is involved and be able to estimate whether or not to press the Government to make these concessions?

The difficulty is that it would entail a good deal of labour to make this inquiry. We think that in present circumstances it would be inadvisable and unfair to put staff on to making this inquiry, at any rate, at the present time.

Are we to understand that when the Committee stage of the Finance Bill comes, despite the fact that the right hon. Gentleman does not know the answer, when Amendments on this subject are moved he will still say that the Government cannot afford them?

Perhaps the right hon. Gentleman would wait until we reach the Committee stage of the Finance Bill, when we shall see what happens.

How can my right hon. Friend arrive at a decision whether or not to pay these sums unless he knows what they amount to? That is what interests the House.

We certainly know the global sum, which has often been given to the House, but it has not, as is quite understandable, been split up into ages.

This is not a question of splitting it up into ages. These Questions ask what would be the sum involved, in the one case of paying sums due to widows, and in the other case of post-war credits attaching to the estates of deceased persons. Surely that information can be given.

Monetary Policy

77.

asked the Chancellor of the Exchequer whether, with a view to preventing an increase of unemployment and with special regard to the increasing supply of goods available, and the lack of public purchasing power, he will now give some indication as to the duration of the present policy of deflation or disinflation.

I do not accept the implication in the hon. Member's Question, that circumstances call for an alteration of present policy. As my right hon. and learned Friend explained in his Budget Speech, our planning must be flexible so as to enable us to adjust our fiscal and financial situation rapidly once we are convinced that an important change is really taking place.

Can the Minister give an assurance that the Government will take some action when unmistakable signs of trouble are apparent; and is he not aware that those unmistakable signs of trouble are well apparent at the present time? Will he not acknowledge the truth and do something about it? What is the use of trying to pretend that it is not there?

I must advise the hon. Gentleman to await the May figure of unemployment before he commits himself on this.

Housing (Cost)

78.

asked the Chancellor of the Exchequer if the statement contained in the booklet "The Budget and Your Pocket," that 1s. 11d. per family per week is paid out of taxes to help provide homes at reasonable rents for the families most in need, and that nearly another 6d. comes out of local rates, applies to Scotland.

The figures given in the booklet are averages for Great Britain as a whole. For Scotland alone, the comparable figure to 1s. 11d. is about 1s. 9d. As for the contribution out of local rates, the figures available do not permit an exact comparison between Scotland and England and Wales, but the average amount per household for Scotland is probably somewhat higher than the average for the whole of Great Britain.

Does that mean that we in Scotland are paying 10 times more for armaments than we are paying for housing?

I should not have thought that that followed, but it does mean that contributions from taxation per household are rather lower in Scotland than elsewhere.

Will the Minister assure us that the Treasury are exercising as great a vigilance on the defence services as on the housing services?

Do I understand from that answer, that the Government are in a position to give separate statistics for Scotland's finance, as no doubt he will be aware that so far the Secretary of State for Scotland has been unable to do so?