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 Renwick Mr George Renwick , Newcastle upon Tyne Central

I wish to impress upon the Chancellor of the Exchequer that one of the great needs of the country at present is new industries. We have been told of the enormous profits which are being made in certain industries. Those profits are being made largely owing to monopolies and to trusts, and therefore it is of the utmost importance that new industries should be encouraged and not discouraged. On the Debate on the Budget last year I told the House I knew of certain capitalists who were prepared to invest a large sum of money in new industries if there was a reduction in the Excess Profits Duty. The Excess Profits Duty was reduced to 40 per cent., and almost immediately those new industries were commenced in the hope that the duty would disappear altogether. We hardly dared hope it would disappear altogether, but we never expected it would be increased. Therefore I hope the right hon. Gentleman, in his concessions to new industries, will treat them with no niggardly hand. I wish to point out to him some of the difficulties from which we who form these new industries are suffering at present. We have competition from the Government, who are giving 5 per cent. to 5½ per cent, for their loans, we have a 7 per cent. bank rate, and we have trusts offering 8 per cent. cumulative preference shares; and, unless we who want to form these new industries can show that we are going to pay an equally high rate on preference shares, plus a fair rate upon the ordinary shares, it is impossible for us to get the necessary capital. I have recently been engaged in the formation of a very large industry, and when it was heard that the Excess Profits Duty was going to be raised to 60 per cent. there were meetings of those interested and orders were given to curtail all further expenditure upon that industry, which is a very serious matter. I hope and believe if the right hon. Gentleman will treat these new industries as liberally as he ought to treat them, resolutions of that description will be cancelled and the new industries will proceed. I hope Labour Members will recognise the importance of these industries. They seem to be in favour of these high Excess Profits Duties. If there is a factory wanting three men and there are only two at the factory gates, the men are the masters, and therefore you want to increase the number of the factories. If you do, the enterprise of the promoters of those new industries will find more employment for the men. Therefore, I hope we shall have words of encouragement from the Labour party to those who meditate carrying on new industries. I thank the right hon. Gentleman for the concessions he has foreshadowed, and I hope they will be of a most liberal character.