New Clause. — (Repeal of s. 36 of 8 and 9 Geo. V, c. 15.)

Part of Orders of the Day — Finance Bill. – in the House of Commons on 8th July 1924.

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Photo of Commander Charles Burney Commander Charles Burney , Uxbridge

I do not think that I quite follow the Chancellor of the Exchequer, because the hon. Member who brought this matter forward put it on the basis that it would increase the number of cheques in use, and reduce the amount of money which people would keep in their own houses, and that, as a result of this, we should get an increase in the amount of money available for lending. Following that point to its natural conclusion, the first thing that would happen would be that we should get increased currency in circulation. That would put up the velocity of the circulation by increasing the purchasing power of persons, due to the disbursement of that money on enterprises. The further result of that would be that the price level of this country would be somewhat put up because of the increased velocity of circulation. But by putting up the price level in this country we shall damage, in a sense, our exchange with New York.

That would further mean that we should have to pay more sterling to New York for dollars owing to the fact that the price level of the country had been raised relatively to New York, and consequently our payments of debt to America would be increased upon a sterling basis. So far as the burden of this extra amount of sterling to be gathered in taxes is concerned, the result would be immaterial, as the revenue upon a given basis of taxation would increase, due to the increase of price level in the country; and if I follow the Mover of this Amendment in his remarks, the point which he is endeavouring to make is not that the Chancellor of the Exchequer would actually lose on this tax. Of course, he would lose money on this tax if he removes the duty altogether, but the argument is that by removing the duty altogether he would benefit trade to a still greater extent and thereby increase the revenue which he would obtain from this better basis of taxation. It is for that reason that I think that it would be worth while to make the experiment, because I do not think that the country would lose. I think it probable that it would make a profit of £6,000,000 or more, and it is because I think that that is a speculation which the Chancellor of the Exchequer would be fully entitled to make that I support the Amendment.