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 Thomas Griffiths Mr Thomas Griffiths , Pontypool

As soon as decontrol took place the employers took advantage of supply and demand, and have been fixing prices at such a rate that they are having a serious effect on other industries as well. I have a case here which was in Court, and the evidence given by a Mr. Taylor, a chartered accountant, on behalf of the Inland Revenue Department. He produced a synopsis of the balance sheet of a particular works. I do not want to name the works, because there was a charge of falsifying the accounts, and the manager was acquitted. Mr. Taylor's synopsis showed that the basis figure of the pre-war profits for the purpose of control was £30,000, and in 1916 the proprietor was entitled to £48,200. In four months the profits were £67,000, but the proprietor had no interest beyond the £48,000. The profits for the works that, year amounted to £203,991, subject to the Munitions Levy, so you see that in pre-war times this firm had an income of £30,000, and during the period of the War, with steel at £15 per ton, it made a profit of £203,991. What is the position to-day? Steel is not at £15, but at £24 a. hon. [HON. MEMBERS: "What is the cost of labour and coal?"] It is for you to reply later on, and to upset these facts if you can. If these employers made this enormous profit, when the trade was controlled, in steel sold at £15 a ton, what are they making to-day, selling steel at £24 a ton? The fact of the matter is that the employers have abused their privileges by increasing prices and taking advantage of the demand being greater than the supply, and that does not only affect the steel industry, but all the industries in the country, and it goes right round, so that you have not only a circle of employers getting the greatest advantage they possibly can, but you cannot blame the workmen for going after a share of these enormous profits that the employers are making. We believe our way of imposing a capital levy would be the best method of raising revenue, but while we do not think the Government's is an ideal method, we accept it because the Chancellor is compelled to get this money, and we hope that before 12 months are over prices will come down. The wave of high prices to-day is not receding, but rapidly advancing, and we want to see them coming down to normal conditions, the same as in pre-War days, and seeing that the Chancellor of the Exchequer has no other source from which to draw and will not accept our proposal for a capital levy, we are supporting the increase of the Excess Profits Duty from 40 per cent. to 60 per cent. I myself wish he had increased it to 100 per cent. to prevent the employers profiteering any more.