§ 46. Sir ADRIAN BAILLIEasked the Prime Minister whether His Majesty's Government have reached a decision on the question of Government assistance to the production of petrol from coal?
§ The PRIME MINISTER (Mr. Ramsay MacDonald)Yes, Sir. The Government have decided to give effect to a proposal which they have reason to believe will ensure an immediate advance in the manufacture of home-produced motor spirit. The proposal will take the form of a guaranteed preference at the rate of fourpence a gallon in respect of light hydrocarbon oils, as defined in the Finance Act, 1928, manufactured in this country from indigenous coal, shale or peat, or from products derived from those substances. The guarantee will be for a period of 10 years from 1st April, 1934, provided that if the Customs duty for any financial year after 31st March, 1935, exceeds fourpence a gallon and no excise duty is imposed for that year, or if for any year the Customs duty exceeds any excise duty by more than fourpence a gallon, then in respect of each such year the period of guarantee will be reduced by three months for each penny of excess. [Interruption.] It is rather difficult to follow, but I can assure hon. Members that, although the statement is rather long and complicated, when it is down in print it will be very simple to follow.
The effect of this arrangement is to vary the period of the guarantee according to the actual preference, that is the difference between the Customs duty and the excise, if any excise duty should be imposed. If the preference remained at its present level of 8d. a gallon, the period of the guarantee would be 4½ years, from the 1st April, 1935. If it was reduced to 4d. a gallon, the period would be nine years from the same date, and any intermediate rate of preference would vary the period of guarantee proportionately. Legislation to give effect to the guarantee will be introduced in the autumn.
§ Mr. LANSBURYIn order that the House may be in a position to discuss this very important statement, which we shall, perhaps, all understand to-morrow when we have read it, I give the right hon. Gentleman notice that, on one of the remaining days that we have for discussion, we shall take this as one of the subjects.
§ Mr. T. SMITHCan the Prime Minister give the House any estimate of the amount of raw coal that is going to be used during the 12 months?
§ The PRIME MINISTERAn estimate has been made, and figures have been supplied to me. It will mean that about 7,000 men will be directly employed, and a slightly less number indirectly. This particular plant which we have in mind will be capable of producing about 100,000 tons of petrol, or roughly 30,000,000 gallons, a year, and will consume 350,000 tons of coal a year, giving employment to over 1,000 miners in addition to the employment in connection with the plant.
§ Mr. LAWSONIs the Prime Minister aware that the Secretary for Mines, in his speech on the Estimates, could not speak definitely as to the success of these experiments? Can the right hon. Gentleman tell us that he has had some report since that time, and what firms have succeeded in the experiments?
§ The PRIME MINISTERI am afraid I cannot carry in my memory what the Secretary for Mines said, but he assures me that he has been misreported in the present instance.
§ Sir A. K. SAMUELWill several firms be able to avail themselves of these facilities, or only one?
§ The PRIME MINISTERIt is a general guarantee to every manufacturer—whoever engages in the manufacture.
§ Sir A. K. SAMUELDoes the right hon. Gentleman expect and hope that several firms will be able to avail themselves of this proposal, or only one?
§ Mr. D. GRENFELLWill the guarantee extend to any of the known processes—hydrogenation, low-temperature carbonisation, or any other of the processes known to be capable of producing oil from coal?
§ The PRIME MINISTERAll that we want is production, and we do not mind the method by which the production is obtained.
§ Captain Sir WILLIAM BRASSWhat will it cost the Treasury at the present rate?
§ The PRIME MINISTERI think that question had better be put down, but I can say now without any notice that the cost will be very small to the Treasury.