Excess Profits (Contracts).

Oral Answers to Questions — National Finance. – in the House of Commons on 27th January 1942.

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Photo of Mr Arthur Colegate Mr Arthur Colegate , The Wrekin

asked the Chancellor of the Exchequer whether it is the policy of the Government to endeavour to prevent manufacturers from making excess profits; and to what extent costing of contracts is being investigated, not on their merits, but on the possible effect that the prices to be fixed might have on the excess profits position of the firms concerned?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

I am not clear precisely what my hon. Friend has in mind. The costing of contracts is one method by which contracting departments endeavour to secure that supplies required for Government purposes are purchased at a fair price, i.e., one likely to produce for the contractor a reasonable profit but not more than a reasonable profit if he executes the contract with due care and diligence. The liability of the contractor to Excess Profits Tax is a separate matter altogether.