§ (1) Any person using motor spirit for purposes other than supplying motive power for motor cars shall be entitled to an allowance or repayment of the duty paid in respect of the motor spirit under this Act, and any person using motor spirit for any of the purposes mentioned in Part I. of the Fifth Schedule to this Act shall be entitled to an allowance or repayment of half the amount of the duty paid under this Act in respect of the spirit.
§ (2) Motor spirit may be delivered without payment of duty or on the payment of half the amount of the full duty payable, in such cases as the Commissioners may approve, and subject to such conditions as to proof, security, and otherwise, as the Commissioners may impose for the purpose of protecting the revenue.
§ (3) If any person proves to the satisfaction of the Commissioners that he has within the previous six months used any quantity exceeding five gallons of spirit which is motor spirit within the meaning of this Act for purposes other than supplying motive power for motor cars, he shall be entitled to obtain from the Commissioners a repayment of any duty which has been paid in respect of the spirit, and if any person proves to the satisfaction of the Commissioners that he has within the previous six months used any quantity exceeding five gallons of motor spirit for the purposes mentioned in Part I. of the Fifth Schedule to this Act, and that the full duty has been paid upon the spirit so used, he shall be entitled to obtain from the Commissioners a repayment of half the amount of duty so paid.
§ Mr. ARTHUR STANLEY (for Mr. Joynson-Hicks) moved, in Sub-section (1), to leave out the word "half" ["half the amount of the duty"].
§ I entirely agree with what was said by the Chancellor of the Exchequer about the duty of the commercial vehicle to pay its fair share of the tax, and I go further, and, as a motorist, I am entirely in favour of this lax upon petrol. We have had to go very 878 carefully into the matter when we knew that motors were to be taxed, as to how the taxation could best be apportioned, and we have come to the conclusion that on the whole the fairest thing was that the tax should be divided into two parts—that one should be a direct and the other an indirect tax. Of all the indirect taxes there was no doubt that the tax upon petrol was the fairest. I agree with the Chancellor of the Exchequer that commercial vehicles should bear their share of this taxation. There is one special feature I wish to bring to his notice. If the persons engaged in the business of commercial vehicles are conducting their business in an efficient way they will obviously have made two contracts—one for the future supply of petrol, and the other for the hiring of a certain number of their cars. This applies also to motor omnibuses and motor cabs, for this reason. They will have made a contract for petrol, and, although they have not made a contract for the letting of their cars, in the case of omnibuses they cannot increase their fares, and in the case of taxi-cabs the fares are absolutely fixed by statute. That being the case, we find this position arises. This tax has come upon them as a surprise, and the great majority of them, I believe, have made contracts for petrol for a year. They cannot put any of this tax on to the purveyor of the petrol, and they cannot put any of it on to the people who use the cars. The whole burden of the tax, therefore, falls on their shoulders. There is already machinery in the Bill for enabling users and owners of commercial vehicles to get a rebate of half the tax—in other words, of 1½d. I would suggest to the right hon. Gentleman that for this financial year only he should give a full rebate of threepence. The explanation is quite clear. At the end of the year—most of these petrol contracts are made for a year—they would be able to make new contracts with the purveyors of petrol on the one hand, and with the people who hire the cars on the other. They would then be in a position to call upon these two 879 parties to bear, at all events, some proportion of the tax. I believe if the Chancellor of the Exchequer could see his way to accept this Amendment nine-tenths of the objections to this petrol tax would disappear, because practically the whole of the injustice of the tax would disappear. I would remind the Committee that this is not in any way defrauding the Exchequer, because the whole of the proceeds of this tax goes to the Road Board, and that has a certain bearing on the point. It must be remembered that the Road Board cannot be in existence for the full year. It can only be in existence for part of the year, and even if this concession were made they would receive more money in proportion, seeing that the Board will not be in existence for the whole year. I would like to make it clear that I and a great many others who take a great interest in the matter look upon the Petrol Tax as an essential part of the Chancellor of the Exchequer's scheme for road development in the country. Though I do not think that any Chancellor of the Exchequer is often accustomed to gratitude, in this case I am sure many people are grateful to the right hon. Gentleman for the manner in which he has dealt with the road question and for the manner in which in a year of considerable financial strain he has been bold enough and foresighted enough to make the whole of the proceeds of this tax available for the improvement of roads. The amount of this concession is not very great. It is difficult to get an estimate, but as far as I can make out on the best figures I could get, it means a reduction in the tax of nothing like 25 per cent. In other words, the Government expect to get £360,000, and the amount of the remission might possibly be £90,000. I would further point out to the right hon. Gentleman that if a precedent is necessary he has a precedent, I believe, in the case of the Coal Tax which was imposed by Lord St. Aldwyn when he was Chancellor of the Exchequer. He found contractors and others in exactly the same position, and I believe he made the remission for the year, and thereby removed a considerable cause of injustice. I adopt entirely the principle of the Petrol Tax, but I do think that by allowing this remission for one year the Chancellor of the Exchequer will remove a sense of injustice and also the greater portion of the opposition to the tax itself.880
§ Mr. LLOYD-GEORGE
I understand that the hon. Gentleman has moved this Motion with the view of eliciting the opinion of the Government upon the suggestion put forward in the course of his speech, and that he had not any intention of pressing the claim of commercial vehicles to complete exemption from the tax. This subject was brought under my notice yesterday for the first time by a deputation introduced by the hon. Member and other Members of the House. It will require a very great deal of very careful examination. I confess when I heard the case presented I thought that at any rate there was a very strong primâ facie case made by the owners of commercial vehicles on the ground that already they had entered into contracts which they could not get out of, and, therefore, they had no real power of adjusting the matter to the new position. The case put by the hon. Member is a precedent very much in point—that is, the precedent of the Coal Tax. I should not like at the present moment, without further examination of the figures, to assent to the proposal of the hon. Member that he has put down here. Though at the present moment it may be that only £9,000 might be lost; still, it would require some clear examination to see what the full effect of the proposal will be, but I am disposed to accept in principle the Amendment of the hon. Member. I think that it is only fair on these commercial companies, which other wise would be very hard hit, and it will give them time to arrange to meet the new burden imposed upon them by this Petrol Tax. If the hon. Member will be satisfied with that promise I will consider the matter between this and Report, and I will consider it with a view to meeting their case. Whether it will be possible for the Government to go to the whole twelve months, I do not know. We might stop at six months as an alternative, but that is a matter I will look into. I do not pledge myself at present. [An HON. MEMBER: "Until the 31st March."] That is the whole year, or it is eleven months. I am afraid of making too great a hole in the Petrol Tax for this year. After all, we want the money for the purpose of improving the rates, and although it cannot be spent this year it will no doubt create a very considerable reservoir for next year for the purpose of improving the roads. For that reason I would rather not at present pledge myself absolutely without giving the matter further consideration. It was only yesterday it was suggested to me 881 for the first time, and if the hon. Gentleman is satisfied with what I have already said, I am prepared to give him the assurance that I will endeavour to meet his views.
Mr. CATHCART WASON
When this tax was first proposed, I certainly felt some alarm at the suggested exemption of commercial vehicles, but the lapse of time has made it abundantly clear that the suggestion of the hon. Member for Ormskirk (Mr. A. Stanley) will meet a considerable grievance among the users of these motor vehicles, especially in London. They will not benefit by the whole of the tax for the upkeep of roads, and there is the further fact that many owners of these commercial motor vehicles are under contract and a number may be heavy losers. I am sure the right hon. Gentleman is one of those who will be the first to try to do anything to remove any feeling of injustice from the minds of any of his fellow citizens throughout the country. As I understand, the suggestion is only for one year, and next year it will be entirely open to the right hon. Gentleman to put on the whole tax. I am not sure whether it would not be the best plan to do that, or restore the tax as it originally stood in the Bill. I sincerely hope the hon. Member will not press his Amendment, and will accept the assurance of the Chancellor of the Exchequer.
§ Lord BALCARRES
I enter my caveat against what the hon. Member for Shetland has stated. I recognise that the Chancellor of the Exchequer has met my hon. Friend, but I wish to make it clear that this is not merely a grievance for six months, and we cannot discuss the Petrol Tax for next year. I want at the outset to point out that the 1½d. rebate has already had a serious effect upon motor car building. I have a letter in relation to a particular case, which I am at liberty to hand to the right hon. Gentleman and any Member of the House can see it. There is a motor works in my Constituency—a small works, and a firm which has been more particularly in the commercial line. That firm practically entered into contracts with a big firm of manufacturers in Manchester, but that Manchester firm came to the conclusion that the 1½d. rebate in Schedule 5 was not sufficient for petrol-driven cars, and they found that the steam car would be more economical. That rebate was insufficient to persuade the firm to have motor-driven cars as 882 against steam-driven cars, which do just as much harm to the road, if not more, and which make no special contribution to the road. No doubt what is promised will be of assistance, but the right hon. Gentleman would have to meet a serious outcry next year if in answer to the suggestion of the hon. Member for Orkney, so far from allowing this rebate, he charges threepence.
§ Mr. MUNRO FERGUSON
The discussion has taken the form almost entirely of a reduction of these taxes. From the point of view of the local authorities I would urge upon the Chancellor of the Exchequer not to make any reduction in these taxes that he can avoid. I should be the last to complain of the Chancellor of the Exchequer, and would willingly support anything which would be required to prevent any injustice being done by a new tax. So far, I am quite ready to go with him, but on the part of the local authorities I protest against anything that would diminish the total fund which will be obtained for the service of the road by these new taxes.
§ Mr. COURTENAY WARNER
I quite agree with my hon. Friend (Mr. Munro Ferguson) that it would be a serious thing if we reduced this amount. The precedent that was given referred, I think, only to exemption of existing contracts. I think that ought to be remembered by the Chancellor of the Exchequer, and that that will not reduce the tax quite so much.
§ Mr. LUPTON
As to this proposed reduction, may I suggest some regard should be paid to the nature of the car and its likelihood to damage the road. I have no doubt some cars do hardly any damage to the road, such as the ordinary taxicab. When you have a motor car with a solid wheel or without any corresponding device, there you have serious damage to the roads, and that should be given serious consideration.
Mr. ARTHUR STANLEY
I thank the Chancellor of the Exchequer for the way in which he has met my proposal, and ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Mr. RENWICK moved, in Sub section (3), to leave out the words, "Commissioners" ["to obtain from the Commissioners a repayment"], and to insert instead therein the words "the Inland Revenue officer of the district."883
§ As far as my experience of the Commissioners goes, a man will spend more in paper and stamps in corresponding with the Commissioners about the rebate than the amount of the rebate itself. If you are to have a rebate at all, the simplest way is to make it through the Inland Revenue officer of the district. Surely the Government have confidence in their own officers to determine what in most cases will be a very small amount. Personally, I do not see how the Commissioners or the Inland Revenue officers are to return the duty paid, because in 999 cases out of 1,000 the person who uses the petrol is not the person who pays the duty. The duty on petrol is paid by the importer, and how the small consumer is to get a rebate from the Commissioners I do not understand. However, that is a matter for the Chancellor of the Exchequer. My point here is that the small consumer ought not to be put to the trouble and expense of correspondence with the Commissioners to get the rebate. It ought to be done in the simplest way, and that is through the Inland Revenue officer of the district.
§ Mr. AUSTEN CHAMBERLAIN
Why is this Sub-section required? What does it do which is not done by Sub-section (1)?
§ Mr. LLOYD-GEORGE
I think it will be found that it is required to carry out Sub-section (1). My right hon. Friend (Mr. Hobhouse) points out that Sub-section (1) refers to motor cars, and this Sub-section refers to cases other than motor cars.
§ Mr. AUSTEN CHAMBERLAIN
No. The first is "for purposes other than supplying motive power for motor cars," and this is the same. The difference in the two cases is that in Sub-section (3) there is a limitation of six months, which does not occur in Sub-section (1), and instead of "motor spirit" it refers to "spirit which is motor spirit within the meaning of this Act."
§ Mr. LLOYD-GEORGE
I would rather not straightway give an answer to that question of the right hon. Gentleman. I should like to look a little further into it and see how the Sub-section is drawn. As to the Amendment, the Inland Revenue Office can, I think it is perfectly clear, take instructions from the Commissioners. I can assure the hon. Gentleman (Mr. Renwick) that the idea that he has in his mind is really carried out in the Sub-section; only you must make the legal responsibility rest 884 with the Commissioners, and not with the local officer.
§ Mr. RENWICK
I quite recognise reason in what the right hon. Gentleman says, but what I pointed out was that in a Bill of this description the thing should be made clear to the lay mind. We do not want everything to have to be construed by lawyers. Any person, without going to consult a lawyer, ought to be able to look at the Act itself and see what it means. You are dealing here with an eighteen-penny matter—a comparatively small matter—and I do maintain that for the benefit of the public at large that the transaction should be made as simple as possible.
§ Amendment negatived.
Lord ROBERT CECIL (for Mr. Du Cros) moved, at the end of the Clause, to add the words:—
(4) Every dealer in motor spirit shall, on the sale as duty paid of any quantity not less than one gallon of spirit which is motor spirit within the meaning of this Act, deliver therewith to the purchaser an invoice stating that the duty chargeable has been paid upon such spirit and setting out the amount of such duty, and, for the purposes of obtaining repayment of any duty, such invoice shall be accepted by the Commissioners as proof that the duty stated in the invoice to have been paid has been paid by the person in whose name the invoice is made out.
§ May I ask the right hon. Gentleman the Chancellor of the Exchequer what machinery he does propose to provide for repayment of the duty? I do not know whether the machinery provided by the Amendment is the best, but at present there does not appear to be any machinery in the Bill.
§ Mr. LLOYD-GEORGE
At present we cannot make any arrangement to repay—not till the Bill is through. Regulations have been framed and are ready for publication in the usual way. Claims will be made through the local Excise office, and no difficulty will be put in the way, for it is desirable that repayment should be claimed without any exceptional trouble.
§ Mr. RENWICK
I do not think that the right hon. Gentleman will find it quite so easy as he expects to frame regulations. Suppose someone imports tea, and that it is necessary to transfer it from one part of the country to another—from London to 885 the Tyne, for instance. In that case an Excise officer is sent with it. This motor spirit will be paid for in bulk, and I cannot see how the Commissioners are going to return money to the small consumers. I suggest that the right hon. Gentleman should further consider this matter. The difficulties are much greater than he anticipates.
§ Amendment, by leave, withdrawn.
§ Question proposed, "That the Clause stand part of the Bill."
§ Mr. JOHN GRETTON
An important question arises here as to whether you will be able to differentiate between motor spirit used for propulsion and for purposes of manufacture or for lighting. The Clause does not state in a clear or definite manner how the rebates are to be made, and that is one of the greatest objections to this tax. This tax may be very destructive of the use of motor spirits for purposes other than propulsion of vehicles. I do not think the Chancellor has yet explained how he proposes that these rebates should be made to persons using spirits for other purposes than propulsion. If the Chancellor, instead of a tax of this kind, had put a tax on tyres, he would have done much better.
§ Mr. GRETTON
This tax is inconvenient and difficult. I agree with the principle that motor vehicles should be taxed, but I think this is an inconvenient and clumsy way of doing it.
§ Lord ROBERT CECIL
I understand that the right hon. Gentleman is going to move an Amendment on the Schedule excluding medical practitioners.
§ Mr. LLOYD-GEORGE
The Noble Lord will find the Amendment down on the Paper. I will now deal with the point raised by the right hon. Gentleman the Member for East Worcestershire (Mr. Austen Chamberlain). Sub-section (1) deals with the repayment of the duty where it has already been paid. Subsection (3) deals with quantities exceeding five gallons used for purposes other than motive power being allowed the repayment of the duty and where it has been used for the purposes mentioned in Part I. of the Fifth Schedule repayment of half the duty paid is provided for. In the case of motor omnibus companies a large quantity of 886 motor spirit is bought. In such cases arrangements have been made for the payment of half the duty instead of going through the process of paying the whole duty.
§ Mr. AUSTEN CHAMBERLAIN
I raise no objection to Sub-section (2). I quite understand that you must have that. What I cannot understand is why you require both Sub-section (1) and Sub-section (3). Sub-section (1) provides that, "Any person using motor spirit for purposes other than supplying motive power for motor cars shall be entitled to an allowance or repayment of the duty paid." Sub-section (3) repeats that statement with a limitation that he is to be so entitled within six months and if the quantity is more than five gallons. Which do you mean? Do you mean to give this without any conditions under Sub-section (1) or only subject to those two conditions under Sub-section (3)? The two Sub-sections are contradictory as they stand, and one of them would be quite sufficient. It is really more a question of drafting than anything else. I do not think it is unreasonable to ask that the claim should be made within a certain period or to provide that it shall not be for a less amount than five gallons, in order to avoid having to deal with trifling correspondence and trivial matters. I suggest, however, that the two Sub-sections are not needed, because the only effect of Sub-section (3) is to limit Sub-section 1.
§ Mr. LLOYD-GEORGE
First of all we have to lay down the general proposition that under certain circumstances there will be a rebate, and you do that, in Sub-section (1). In Sub-section (3) you deal with the limitation and the machinery. That is really all that is meant. I think that, on the whole, it is more convenient to put it into two Sub-sections.
§ Mr. AUSTEN CHAMBERLAIN
I think Sub-section (3) really ought to be a proviso in Sub-section (1), and in that way you might provide for these limitations. Perhaps the Chancellor of the Exchequer will look into the matter.
§ Mr. LLOYD-GEORGE
The right hon. Gentleman thinks it might very well be put in as a proviso. I will not now express any opinion about it. The intention is clear, and I will consider later on whether it is necessary to put in a proviso.
§ Sir E. CARSON
May I point out another difficulty. The first Sub-section says any person using motor spirit for 887 purposes other than supplying power shall have this rebate, but the third Sub-section says that any person proving to the satisfaction of the Commissioners that he has within the previous six months used any quantity exceeding five gallons of spirit, which is motor spirit within the meaning of this Act for purposes other than supplying motive power for motor cars, shall be entitled to a repayment of the duty. Those are two quite different things, absolutely inconsistent.