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 Sir Henry Fildes Sir Henry Fildes , Stockport

I believe in circumstances like this it is usual for a new Member to claim the indulgence of the House, and I may say that such indulgence was never more necessary than at this moment. For the first time in my life, I appreciate to the full the true pathos of a letter which a soldier-boy in Palestine wrote to his mother in Wigan. He said: Dear mother,—I am in Bethlehem, where Christ was born; and I wish to heaven I was in Wigan, where I was born. May I, as a new Member, say how much I was impressed by the very admirable and lucid way in which the Chancellor of the Exchequer presented his statement to the House. Of course when you come to think of it, it is an obvious thing, and a thing which we have a right to expect, because if there is a gentleman who by birth and tradition who should be expert in the production and application of this screw it is the right hon. Gentleman. It was a great surprise to me when the right hon. Gentleman at the beginning of the Debate came to the House consisting of over 700 Members, and without hearing any possible suggestions from his colleagues in the House, intimated that he was about to stand or fall by his proposition. Standing, Mr. Speaker, as I understand it, is a very wearying performance, and I was surprised, in view of the Indian experience of the right hon. Gentleman, to hear the word "fall" come so glibly from his lips. I would like to address my remarks to the right hon. Gentleman in the capacity with which he has endeared himself to this House—that of a sitting Member.

The origin of this tax, he will, I think, agree is a wrong one. There have been too many objectionable interpretations. What does it mean? It means this: when War was declared the Chancellor of that day intimated that the wealthy plutocrats of this country were going to be placed in a stronger position than their poorer brethren. The position appears to me to be one of this kind: hon. Members will recollect that the theory on which this tax was based was that we were anxious to get money out of the men who had made money out of the War. The position that the Chancellor takes up is, that taking our wealthy plutocrats, take Messrs. Coats, say, they are at liberty, before they are called upon to pay a penny of Excess Profits Tax, to make at least something like £3,000,000. Is it fair, I ask? Supposing in 1917 or 1918 some opposition to that great combine had been contemplated? What is the position? We find that the newly competing business is allowed a certain vague amount on its capital only, and after that is liable to this very serious tax. There is a point I would like him to make in that connection, and it is this: We are all out, so far as possible, to get rid of— shall I say?—the overbearing power of the trusts. It is as certain as the sun rises, and I believe the right hon. Gentleman will agree, that sooner or later the very inflated values attaching to every commodity in use in the world will fall. In the cotton trade, at the Armistice, yarns fell inside of two months something like 2s. 6d. a lb. The point I wish to make is this: unless firms who are restarting business to-day are allowed to accumulate some reserve to be ready for this drop, the final result of this legislation is going to be that the wealthy firms, the firms with a big pre-war standard, will be in a more strongly entrenched position than ever, and their competitors of more recent date will be wiped out and snowed under by the loss that is certain to ensue.

5.0 P.M.

I am not concerned with the big men, and, like everybody else I suppose in this House, I have been inundated with details of hard cases. I have one case which is typical of many. An officer received a gratuity of £850 from the War Office, and he was a wounded man. His father lent him £1,000, and on the joint guarantee of his father and himself he obtained a further sum of £500 from the bank and started business. I appeal to the right hon. Gentleman that it is unfair under circumstances like those that men who have come back from the War, where they have been largely engaged in defending the property of men with a high pre-war standard, and the only message of comfort the right hon. Gentleman has to give them is to say that he will stand or fall by taking 60 per cent. of anything they make over and above the beggarly allowance the Treasury allow!

There is just one other point and it is this. There was a warehouse destroyed in Wood Street, London, and I think this case is within the cognisance of most hon. Members. A Zeppelin raid destroyed a large warehouse, and the firm occupying that warehouse did not go on with the business, but two of the managers started business. They had been in business only 12 months when one of them was taken into the Army and the other into the Navy. Last year they came back to start business and they are faced with the welcome news in the right hon. Gentleman's Budget that after the whole series of disasters they have suffered they are met with this beggarly allowance and above that the Chancellor of the Exchequer will claim 60 per cent. to help to pay the cost of defending the gentlemen with the huge pre-War standards. When this War was declared in 1914 the people whose interests had to be largely. defended, apart from personal considerations such as ourselves, our wives and children, were that landowners of this country and the pre-War plutocrats. I say that it is unfair to throw on returned soldiers and the men who have recently started business the additional cost of paying the debts which might legitimately be charged to the firms with large pre-War standards.

I would like to be allowed to make two suggestions. I understand there is a Motion coming along to the effect that it shall be permissible to the Treasury to make an arrangement for extended payments of this tax, but that will not meet the situation. It may meet it with regard to the past, but what about the man who cannot possibly pay to-day if under this tax he is simply incurring fresh liability for the Treasury? I appeal to the right hon. Gentleman most earnestly, and with all the intensity at my command, and I ask him if he can see his way to alter at least the standard, that is, the datum line of this tax. Why not start it at £2,000 a year and say that if a man or a firm had only made £2,000 they, at any rate, should only be liable for the ordinary tax and Super-tax? Above that I would like to see the right hon. Gentleman make a further concession, and make them liable for the ordinary tax.

In view of the increased cost of living it is within my own knowledge that there are thousands of perfectly heart-breaking cases of men who have had the heart knocked out of them altogether because they feel it is hopeless. I am speaking of the little man with only £1,000 or less. He is the man who is very hardly hit by this proposed legislation. No man has condemned this kind of legislation more than the Chancellor of the Exchequer, and when he replies I should be extremely grateful if he could give us some information on this point. I may have misunderstood the right hon. Gentleman, but, as I gathered, he seemed to state that had he known that the reduction from 80 per cent. to 40 per cent. would not lead to increased trade and prosperity in this country, he would not have made that reduction. I fail to follow that argument. I thank the House very sincerely for listening to these imperfect remarks. I am afraid that I have not expressed myself very admirably, but I am intensely anxious that the poorer section of the community should be protected from the very harsh incidence of this taxation.