Orders of the Day — Amendment of Law.

Part of the debate – in the House of Commons at on 21 April 1937.

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Photo of Mr John Colville Mr John Colville , Midlothian and Peeblesshire Northern

I will take another typical one, the 3½ per cent. War Loan, which moved from £3 5s. 3d. to £3 7s. 2d. I think that it was rather an over-statement to say that there had been so much movement in gilt-edged securities as a result of the Defence Loan Bill. I would remind the hon. Member that at the time when the Government of which he was a Member was in office, in August, 1931, the 3½ per cent. Conversion Loan yielded £4 9s. 10d. That is a big difference. The conversion operation must be borne in mind, but here, again, it is as well to point out that a great saving has been made by the National Government by creating the conditions which made conversion possible.

The right hon. Gentleman the Member for Hillhead raised a number of points mainly relating to the National Defence Contribution. I will try to answer some of them, but there are others which must await a later stage. In general, he gave his approval to the Budget, but expressed some anxiety about the National Defence Contribution. I rather differ from him on one point. He felt that there was a risk of extravagant extensions on the part of employers to avoid the payment of this new duty. He gave cases where under the Excess Profits Duty such a thing had taken place. I agree with him that it took place, but there is a great deal of difference between the rate which was chargeable under the Excess Profits Duty, which rose as high as 80 per cent., and the present rate of duty in this tax, which my right hon. Friend was at pains to point out was a temporary tax to meet a temporary burden. Would a man for the sake of avoiding a temporary tax of 20 or 30 per cent. spend huge sums of money on large extensions knowing that in the future they might be of little use? There is all the difference between the rates chargeable in this case and the rates chargeable in the case of Excess Profits Duty.