GRADUATED PROFITS TAX

Evening Post, Volume CXXIII, Issue 129, 2 June 1937, Page 12

GRADUATED PROFITS TAX

"SIMPLER METHODS" TO GAIN SAME END

PREMIER BOWS TO WILL OF HOUSE

(British Official YVUreUu.) (Received June 2,12.30 p.m.) RUGBY, June 1. The Prime Minister (Mr. Neville Chamberlain), in winding up the second reading debate of the Finance Bill in the House of Commons tonight, announced the withdrawal of the proposed national defence contribution—a graduated tax on the growth of profits—which was the outstanding feature of his Budget statement as Chancellor of the Exchequer. Mr. Chamberlain's speech followed a sustained and powerful attack on the proposal, to which Mr. Winston Churchill made an important contribution.

After a general defence of the Budget proposals against Opposition criticism the Prime Minister turned to part 3 of the Bill, against which criticism had been directed chiefly from the ranks of the Government's own supporters. He said he had to admit that there appeared to be genuine alarm as the result of the proposed new tax which had held up business to an extent which was very undesirable. When the Bill was in committee the Chancellor would not proceed with part 3, providing for National Defence Contribution, and in the meantime he would work out other proposals for a simpler tax upon the profits of industry. The tax would be designed to produce not less than £25,000,000 in a full year. Following Mr. Chamberlain's announcement the Bill was read the second time. "GREAT DEAL OF TROUBLE." In announcing the withdrawal of the National Defence contribution the Prime Minister said he was told that the tax was expected to give a great deal of trouble, to cost a great deal of money, and to distract people from ' attending to.ordinary routine business. On the.other hand, he was told that the industrial interests wished it to be understood that they did not challenge the propriety of finding the amount he wanted from profits.

"It seems to me," said Mr. Chamberlain, "that I should not only be something less than prudent, but that I should be stupid if. I were to persist in that particular method of getting what I want—which already, is not going to give that which I want—if I can get it by simpler methods and in larger amounts."

That was what, after consultation with the Chancellor of the Exchequer (Sir John Simon), he proposed to do. He would not anticipate what the proposals of the Chancellor would be. This would require a new financial resolution and the first intimation the