And that it is particularly bad in this case—in getting after profits which may not have increased since the war started. The Minister is going to take a bigger amount of possibly decreased profits after the period since the war started. The Minister's only justification for this is that he must get the money. I suggest to him that, before he does that, he ought to be in a better position to justify himself in regard to economies. He made no justification on that. He did say that he had approached various people, and made a misleading statement with regard to people which, however, he afterwards corrected. It seems to me amazing that this country is supposed to be able to bear the expense of an Army costing £25,000 a day at a time when the Minister presents himself to the House as a person who is unable to effect economies to any extent in the other State services. I should have thought that the Minister would, first of all, have gone to the spending Departments and said: "Very good, this year we have to find £9? millions for the Army, some to be raised by borrowing and more of it by taxation. It is a very heavy burden, and before I start to impose taxation of that type, particularly retrospective taxation, I want to know that every penny has been skinned off the Estimates." Instead of doing that, the Minister comes in here and says he tried to get the Defence Estimate cut down and could not get any support for himself on that.
What about the other Estimates? Does the Minister present himself to the House in this way, that, no matter what happens in the country, he is going to get this extra load of £9? millions slapped on the people, and that he cannot save, say £100,000, on any of the ordinary Estimates? If that is so, it is incredible. The Minister is expecting to get £1,700,000 under this tax. If business begins to collapse, and that next year the Minister has to make the same demand for £9? millions for the Army, part of it to be raised out of taxation and part by borrowing, and that by reason of businesses failing his revenue also begins to fade out, surely in those circumstances he is not going to come here and say that there is not a penny to be lopped off anywhere. In doing that, the Minister would be presenting himself to the House in a ludicrous position. No one is going to credit that.
During late years we have heard of some efforts at economies, but they have not resulted in any good. One year we were told about the committee that had inquired into the expenditure of the various Departments. Later, there was the lamentation that it did not achieve much. A big effort should have been made this year to cut down expenditure. The spending Departments should have been told that they were on a ration: that they could spend up to a certain amount and no more, and that all excrescences should be lopped off. A deaf ear should have been turned to all fancy spending. In fact, all fancy spending should have been hacked down to the roots. The expenditure on all the ordinary services, leaving out the Army, should have been cut down when we think of this extra burden of £9? millions on an already over-taxed community.
The Defence Estimate itself requires close examination. It was presented to the House in bulk, and for various reasons it was not discussed here in detail. No one engaged in professional, business or commercial life believes that the proposed expenditure of £9? millions on the Army this year is money that is well spent, and particularly when they get a hint as to the proportion of it that is to be spent on equipment. I suggest to the Minister that before he says he must get the money, he should tell the House, in an exhaustive way which would convince the public, of the various steps he has taken to effect economies in all State services, other than the Army; how far he scrutinised the spending Departments, whether he put up any suggestions for economies and, if so, why he was rebuffed. This tax has definitely been introduced by the Minister in a setting which was, I think, deliberately intended to get him popular acclaim. He has caught Deputy Hickey with it because he has said that he was going to give to the Exchequer a very substantial proportion of the increased profits which have accrued as a result of the war. In the Budget statement we get this:
"Corporation profits tax at present is not charged on the first £5,000 of profit. I propose to reduce this exemption limit to £1,000."
Deputy Hickey may be interested to know that if firms failed to make a profit of £5,000, if they only made £3,000 or £4,000, they are going to be taxed on all they made over £1,000, and that certainly cannot be caught by the phrase, "Excess profits which have accrued as a result of the war."
There are other matters that will arise on the amalgamation of these Resolutions. There are certain figures that will require some explanation. I want to stress a point that was made by Deputy Dillon, already revealed to us in one of the reports of the Census of 1936, the report that was produced at the time the industrial volume made its appearance. We get a note on page 8 of the report to the effect that a feature of the table with regard to industrial production was the decline in the number of small firms engaging in industry. We get that at a time when the report was referring to increased industrial activity.
The peculiarity was that although there was an increase in industrial activity, of course entirely balanced by a bigger decrease in agricultural activity, still inside the sphere of manufacturing industry there was a decline in the number of small producers. There is a small paragraph further on which sums up the matter. It says that it seems generally to be true that the considerable development in productive industry in the past decade has been accompanied by a decline in the number of small-scale producers. Deputy Dillon expressed the view that this will have the effect of preventing some of the smaller people from developing, so you are following the bad social tendency which had been observed in the Census of Production.
I think Deputies are prone to lend too ready and willing an ear to the suggestion that the businesses in this country which will be hit by this tax will be big businesses, and, as the big business people are more notoriously the enemies of the poor than the smaller business people, well then, let them have it, and have no great sorrow for them. Of course, those people who are in industry, those people who are in business, those people who are going to be hit by this tax, are people who are giving considerable employment, and I do suggest to the Minister that there is a point of principle involved. I think the Minister is following in the footsteps of his predecessor, who imposed a certain retrospective tax on the banks, but nobody bothered about it because the banks were among the bigger people. Here again we have the tendency developing, and it cannot even be excused on the grounds of "excess profits which have accrued as a result of the war". Apparently, either the Minister is reckless as to the harm he will do, or he has duped himself into the belief that he has to be indifferent to it because he has no other way of getting the money. I should like the Minister, before the debate ends, to let us know what would be the result, say, over a period of three years, if he put on this corporation profits tax at the lower limit and at this higher rate which he proposes now, and carried it on as from this moment? How would he fare if he did that, say, over the three years' period ahead? How would that compare with what he hopes to get under this part of his Budget proposals, retrospective as they are? I should like to have that particular matter explained.
In connection with this tax, and also in connection with the next one—possibly the Minister has certain figures which he can give me—as I read the table of receipts and expenses I find that the Estimates for 1941-42 of all taxation show that between corporation profits tax and excess profits duty the sum of £673,000 was expected; we will call it £700,000. He expects to get in an additional £1,400,000 in this year, that is double what he used to get from the combination of those two taxes. I am merely emphasising that to show the shattering blow which this is likely to be in certain industries; in other words, they have to find in this year the amount which ordinarily under the old taxation, and it was heavy enough, they would find in three years. They are going to find all that in one year. In addition, Deputy Dockrell and Deputy Benson have referred to the fact that a lot of them had possibly distributed in dividends the money that came into their hands.
They have no way of getting that back unless the Minister is going to amend the law to compel people to pay back the profits distributed to them by way of dividends. If not, does he contemplate with an easy mind the fact that business people hit by this tax will have to go to the banks to borrow money in order to pay the Minister, and how does he hope that they will be able to pay that money back in a period when trade is on the decline, and when the Minister's colleague is actively engaged in calling in employers of all types and telling them that, as far as he can see from the amount of stocks in the country, business will be seriously on the decline before the autumn has gone? I have been wondering for some time past whether the Minister for Finance, in putting up those proposals, consulted his colleague in Government, the Minister for Industry and Commerce, and got from him—or credited when he got from him—the story which the Minister for Industry and Commerce told employers recently with regard to the possibility of business being very seriously brought low inside a very limited period. I suggest to the Minister that before this taxation is imposed he should certainly go back and search hard to see whether the amount to be derived from it could not be saved out of the masses of money which we are voting for other services.
