Amendment No. 72 is a fall-back proposition if the Government do not feel able to accept Amendment No. 29 which we regard as being reasonable. Under Amendment No. 72, £500 would be the amount of stock which would not be taken into account. It would, therefore, take out all the tiddlers.

Amendment No. 29 is one of the most significant amendments which the Committee has had to discuss today. The Chancellor made the case for the remissions of corporation tax very clearly in his Budget Statement when he said: What happens in times of inflation is that the cost value of the closing stock becomes much larger than that of the opening stock because the stock is replaced at higher prices. This causes an acute liquidity problem, a shortage of cash for the payment of wages, materials and other expenses."—[Official Report, 12th November 1974; Vol. 881, c. 264.] That situation made necessary the remissions in corporation tax announced in the Autumn Budget, partly doing away with the savage increases in corporation tax which the Chancellor imposed in the spring Budget.

The penitent is always welcome. We would not wish to embarrass him in his penitence but we simply say that the idea is wholly to be recommended. We have to consider to which sector of the business community this problem applies most. I suggest that by definition it applies in its most acute form to the smaller businesses. These are the businesses where there is no outside available finance, the businesses which are financed out of plough-back of profits. This plough-back is squeezed by rising costs and wages on one side and on the other side by pegged prices. Availability of cash has therefore been limited.

The Government recognise that because before the last General Election, in August 1974, they published a white paper "The Regeneration of British Industry" in which they said: in times of economic difficulty it is often the small businessman, dependent to a great extent on personal wealth as a source of finance, who suffers the greatest hardship. The Government are therefore reviewing the problems of small businesses and will put forward separate proposals to cater for their special needs. The Committee will realise that this is the first opportunity the Government have had of showing how they intend to cater for those special needs. How do they do it? Pious words before the election are one thing, but actions speak louder.

This is the only part of the company sector which is not to get the benefit of the remissions of corporation tax following on increases in the value of stock. These are the companies whose stock is £25,000 or less. In effect, the small businesses are to be left without any assistance at all. I am glad that we have the Under-Secretary of State for Industry who has responsibility for small businesses sitting on the Government front bench with a slightly worried look on his face. While we welcome his presence we would have welcomed far more some action by him to prevent small businesses being singled out in this way.

There is another group which will not benefit—the self-employed. They have already been picked out by the Secretary of State for Social Services for a private clobbering through the unfair increase in national insurance contributions which comes into effect in April. Insult is added to injury when they too do not benefit under the Clause. There is an overwhelmingly strong case for saying that of all the companies that should have benefited the ones that need it most are excluded from benefit.

7.30 p.m.

One asks why that is. I have made inquiries, and I know that the brief of the Minister who is to reply will say "Administrative difficulties, reject amendment" or words to that effect. Does that hold water? The revision of accounts is done by qualified accountants and, as we are dealing with companies, it has to be done by their auditors. There will be, in the impartial position between the company and the Inland Revenue which is held by auditors, a qualified body of men preparing the accounts and making a mathematical calculation.

That calculation is not a very difficult one. Before coming into the Chamber I tried to do it myself and I found it to be so simple that even I could do it. One takes the stock at the beginning of the year and the stock at the end of the year and subtracts one from the other. One then reduces the figure by 10 per cent. of the trading profit, and the result is the reduction in taxable profit which comes into the calculation.

I picked a company at random from "Moodies" in the Library. These are the figures for the British Printing Corporation. Opening stock £11,159,000, closing stock £13,957,000—a difference of £2,798,000. We take away 10 per cent. of the trading profit as defined in the Bill, £742,500, and we are left with £2,055,500. So the profit for the year is reduced by that amount before calculating the 52 per cent. corporation tax, and there is a remission of £1,068,860. It took me about three minutes to do that, but the Treasury is allowed to use electronic calculators which will get through the calculation much more quickly than I did.

I am grateful to my hon. Friend the Member for Gloucestershire, South (Mr. Cope), who reminded me that a prominent firm of city accountants on the morning after the Budget rammed through its calculator all the accounts of several hundred businesses for which it had responsibility. By midday on the day after the Budget the remissions for each company had been produced. If the calculations can be done in that way, the Government's case that they cannot do it does not stand up.

Apart from that, there are the Chancellor's words in his Budget Statement: This problem has become so urgent during the present year that I am persuaded that industry needs a substantial immediate improvement of its liquidity".—[Official Report,, 12th November 1974; Vol. 881, c. 264.] I accept the Chancellor's advice that there is a liquidity crisis and that an improvement is needed immediately, but if that is so, why should he single out small businesses as being those which are not to benefit from his remission?