Orders of the Day — Excess Profits Duty.

Part of the debate – in the House of Commons on 28th April 1920.

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Photo of Mr George Terrell Mr George Terrell , Chippenham

There could be no greater condemnation of the tax than the words which my right hon. Friend then used. We are now considering the Budget for the year 1920–21, and in his statement the other day he stated that he was to get £220,000,000 from the Excess Profits Duty, and that of that sum £10,000,000 would be the increased revenue by raising the rate from 40 per cent. to 60 per cent. Therefore, I suggest to the House that the total amount the Chancellor will get by the continuance of this tax is only £30,000,000. The other £190,000,000 are the arrears from last year and previous years, which will come to him without any renewal of this tax whatever. I do trust that that point will be made clear, because from the Budget Statement as it stands, I venture to think the House considers that these Resolutions have to be passed, otherwise there will be a shortage of £220,000,000 in the Revenue for the year. Nothing of the sort. The shortage will be £30,000,000, and no more. Are we going to re-impose a thoroughly bad tax for the sake of £30,000,000? It is less than £30,000,000, because the new Corporations Tax is estimated to produce £50,000,000, but £15,000,000 less during the period that the Excess Profits Tax is in operation. Therefore, the £30,000,000, unless I am mistaken in this, will, on the imposition of the Corporations Tax, be reduced to £15,000,000. A surplus is estimated of £234,000,000, which will be available for the general reduction of Debt this year. That is on the basis again, I understand, that the debt is wiped off in 26 years. Are we obliged to wipe it off in 26 years? There is no necessity for raising this money at all. Striking out the Excess Profits Tax will reduce by £15,000,000 or £20,000,000 the balance which is available for the general reduction of Debt, and, as against that, you have got the margins on the Treasury Estimates. We are accustomed year after year to finding that the Treasury have underestimated. We find year after year a surplus on all Treasury figures, and it is likely that this year we shall have a surplus on Treasury figures.

I do urge, for the reasons I have given, that the time has come when this tax should be completely dropped. There are some who say that you cannot drop it completely; they are shivering in their shoes about the War Profits Tax. I am not thinking about those people. I am thinking of the small trader, the small manufacturer, who is to-day oppressed with this tax. I am not thinking of the man who has made his profit and banked his money. If that man wants to continue to put the burden on my back by this Excess Profits Tax, then, in my turn, I shall help others to put the burden of the War Profits Tax, if such a tax is introduced, on his back. We will have equality of treatment; we will have equality of sacrifice. I do trust that my right hon. Friend will turn a sympathetic ear to the appeal which I have made to him. I am told that in his Statement the other day he said that he would stand or fall by this tax. I do not really think that he can have taken that sort of obstinate determination. I have watched my right hon. Friend's career for many years with the greatest interest, and, I might almost say, affection. I have followed him in his policy, and I look upon him to-day as the head of the Exchequer, as the head of the business part of our Government. It is not a business proposition to say, "Here are my proposals. Before they are discussed in detail, I will stand or fall by them." I am perfectly certain that my right hon. Friend had no thought of that kind in his mind. I look upon him as one with a great name who has done in the past much valuable work for the country, and I am sure he will continue to serve the country in the future. But I do hope he has not made up his mind that whether this tax is sound or unsound, whether it is just or unjust, he will stand or fall by it. I do not think that was his intentions, and I do think I have shown that it is an unjust tax, that it excites the greatest amount of hostility from every part of the country, and I hope he will see his way to withdraw the tax entirely in the terms of my Amendment.