New Clause. — (Charge of National Defence Contribution.)

Part of Orders of the Day — Finance Bill. – in the House of Commons at on 30 June 1937.

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Photo of Mr Albert Alexander Mr Albert Alexander , Sheffield, Hillsborough

I think it is fundamental that the Chancellor of the Exchequer should address his mind to this point that, if the Government in 1933, in bringing for the first time certain corporate bodies like industrial and provident societies into assessment for Income Tax, then settled what they believed to be the actual, just basis upon which those bodies should be taxed for Income Tax, if they are keeping their word to the House in regard to the application to the new tax it should be made clear, either by a change in the wording or by a specific pledge that it will be changed, that those societies will not be assessed upon a larger sum than their present assessment in relation to Income Tax, because unless the Chancellor does that he is treating the industrial and provident societies, and will in certain respects be treating the building societies, in an entirely different manner from that in which he is treating the ordinary trading company. It is clear from a number of detailed examinations that I have made already from the last available accounts of bodies of this kind that, whereas in the case of a company assessed to Income Tax under the existing Income Tax law, they will never in any case pay more than one-fifth of the standard rate of Income Tax as National Defence Contribution, industrial and provident and building societies will pay substantially more than a fifth of the standard rate of Income Tax, and that in spite of the fact that their recognised position under Income Tax in the past has been built up and agreed to by successive Governments because of the nature of their composition, their personnel, the standard of income of the shareholders or members as the case may be, and, therefore, the actual imposition in these cases of National Defence Contribution will be at a higher rate than is placed upon large and important firms and companies.

I cannot believe that that is really the intention of the Exchequer. With his great personal experience in taxation cases and the views that he has expressed in the past, I do not believe that the Chancellor of the Exchequer can possibly intend that that differentiation shall take place. It will enormously facilitate the Debate on later Amendments on the Clause if he will make it clear now that it is not intended to put National Defence Contribution at a higher percentage rate upon those bodies than is put upon all other trading partnerships or companies, for all the figures that I have gone into prove conclusively that that is what this Clause is doing.