HC Deb 02 August 1912 vol 41 cc2560-8

(1) The right to a repayment or allowance of one-half of the duty on motor spirit under the Finance Act (1909–10) Act, 1910, conferred by Section eighty-five of the said Act upon any person using motor spirit for the purposes of supplying motive power to the vehicles specified in Sub-sections (2) and (3) of Part I. of the Fifth Schedule to the said Act shall extend to any person using motor spirit for the purpose of supplying motive power to any of such vehicles while it is let on hire for a period not exceeding one month, and whether it is standing or plying for hire or not.

(2) Section eighty-five and Sub-section (2) of Part I. of the Fifth Schedule to the Finance Act (1909–10) Act, 1910, shall be construed and have effect as though the words "or while it is let on hire for a period not exceeding one month "were inserted at the end of such Sub-section, and Section eighty-five of the said Act and Sub-section (3) of Part I. of the Fifth Schedule to the said Act shall be construed and have effect as though the words "or let on hire for a period not exceeding one month" were inserted at the end of such Sub-section.

(3) Nothing contained in this Section shall operate to entitle any person to the repayment or allowance of any duty under the Finance (1909–10) Act, 1910, in respect of motor spirit used by him prior to the passing of this Act.

Mr. PETO

I beg to move, "That the proposed Clause be read a second time."

This proposal is one in regard to which I need only trouble the Committee with a few words. It deals with such a simple question, and with such an obvious injustice, that I am rather surprised not to have received an intimation that it is the purpose of the Government to accept it. It is an Amendment of the law which has a peculiar interest to the hon. Member for Orkney and Shetland, who is, undoubtedly, in favour of allowing a remission of Petrol Duty to cars or other forms of petrol engine propelled machines which do not ply or stand for hire, and which are used exclusively in trade. It refers more especially to those cars and other similar vehicles which are owned and used in Scotland. The reason I particularly mention this aspect of the case first is that the hon. Member for Orkney is not here, and is therefore unable to support the Amendment, although, without doubt, he would have done so had he been present. The whole point is this. Under the Act of 1883 there is a definition of hackney carriages which I will read to the Committee:— A hackney carriage means any carriage standing or plying for hire, and includes any carriage let for hire by a coachmaker or other person whose trade or business it is to sell carriages or let carriages for hire, provided that such carriage is not let for a period amounting to three months or more. That definition is carried on in Schedule 5 of the Act of 1910, in a Sub-section which says what forms of vehicle may claim remission of half the Petrol Duty:— A motor cab, motor omnibus, or other vehicle, being a hackney carriage within the meaning of Section (4) of the Customs and Inland Revenue Act, 1888, while standing or plying for hire. I have read the definition within the meaning of Section (4) of the Act of 1888, and I will now put shortly to the Committee how the case stands. The intention is to allow remission of half the duty on hackney carriages, as defined in the Act of 1888, where owned by a coachbuilder or person whose business it is to manufacture and let these carriages, provided that they are not let for a period of more than three months. But there are other words added to provide that they shall stand or ply for hire. I ask the Committee to consider how monstrously unfair that rule is in its operation. These carriages, owned by Scottish hotel keepers, absolutely replace the old charabanc, or wagonette, or machine as it is called there, with which hon. Members who have been in Scotland are perfectly familiar, and with which I hope many of us will be familiar again in ten days' time. These motor vehicles replace the old machine which was exempt as a hackney carriage under that Clause of the Act of 1888, but this special remission of Petrol Duty, which corresponds to the old remission of the Carriage Tax, is expressly stated to be only for those hackney carriages which stand or ply for hire. How can they "stand" if there is no place for them to stand at; how can they "ply" if there is nobody to ply for?

These vehicles owned by hotels in Scotland and by public houses and hotels throughout every part of the country are absolutely part of the business of these people. They are not private luxuries at all, they are as much part of the trade as that of the hackney carriage keeper who happens to be in the neighbourhood of a town. Let me give one illustration. Take the case of an ordinary hotel in any English country constituency. In a great many places there is no cab stand at all. I have a case in mind where an hotel proprietor thought that this remission must be intended for him. He could not believe otherwise. He had kept half a dozen or more cabs to accommodate the public demands for years, he had supplied them at considerable cost, and because he was a wise man who wished to push his business, he had also gone in for one or two small motor cars to do exactly the same kind of work, station work, to accommodate his customers and to take commercial travellers about their business. He naturally asked for a remission of Petrol Duty. He was told, however, "No, your cars do not stand or ply for hire; they therefore do not come within the Act." He suggested to the Excise officer, "Will it do if I send them to the railway station, as that is the only place in the town which in the least corresponds to a cab stand?" He was told, however, that that was not, strickly speaking, standing or plying for hire, and that his vehicles could not be included as hackney carriages. I want to put in at the end of the definition, which is in the Schedule of the Act of 1910, (he words "or while it is let on hire for a period not exceeding one month." Under the Act of 1888 it was a period of three months, which precluded a person from claiming that the carriage which was part of his business was a hackney carriage. If it was let for three months it was considered to be more or less in the nature of a jobbing business and a carriage that was, to all intents and purposes, a private conveyance.

Since the Act was passed, the practice of going into the motor-car hiring business, apart from the hotel business, has grown. I know at least three persons in my own Constituency, one of them being my strongest political opponent, who have gone in for keeping a small car in order to cover a large part of a scattered area, which the right hon. Gentleman knows very well, knowing that they can do a business by letting this car. The only reason they are excluded from the remission of half the Petrol Tax is that there does not happen to be a cab-stand where the cars can be sent to stand. It is therefore mere accident which decides whether a man is entitled to a remission of the Petrol Duty or whether he has to pay the whole tax. There is no justification for continuing the tax upon that basis, where it is absolutely accidental in its incidence. One person can get off because there is a paved road in his neighbourhood with a cab-stand. He can comply with the Act, although it is not part of his regular business, by sending his car to stand there every now and then in order to satisfy the Excise officer. But other people over practically the whole of Scotland, except in the large towns, have no chance of complying with the terms of the present Act. It is obviously unjust and contrary to public policy to create these feelings of injustice. Where a man has been in the habit for years of getting a remission because his vehicles were part of his business, he finds himself suddenly precluded because he happens to be carrying on a trade in a rural district, with a short season, where it is essential, in order to get any business, that he should replace the old-fashioned vehicle with the modern vehicle. He finds the Chancellor of the Exchequer coming down upon him and saying that because he carries on his business in one locality and not in another, therefore he will be charged the whole duty, although it is a trade vehicle, as if it were a private motor car of forty horsepower. I shall be delighted if any hon. Member on the other side of the Committee would support my Clause and enable me to go to a Division, as I certainly shall if I have the opportunity.

Mr. HOBHOUSE

The intention of the Clause, as I understand it, is that where a carriage is now practically a private carriage, and where it is occasionally let on hire, if it is let for a period of less than one month—

Mr. PETO

Never let for more than a period of one month.

3.0 P.M.

Mr. HOBHOUSE

It shall be entitled to the rebate which it does not now obtain. The intention of the Chancellor of the Exchequer, when this Section was adopted in 1910, was that there should be a clear distinction drawn between the carriage kept by an innkeeper for the convenience of people staying at his inn, or which was occasionally taken out by residents in the locality for a short time, and the vehicle which daily stands on a cabstand or plies for hire. The hon. Gentleman seeks to take away that distinction by saying that if this same private carriage is lent for a period of less than one month the owner shall get the rebate. That period of less than a month would be renewed and renewed again, at the moment the contract came to an end, and the result of those renewals would be that some private carriage which is expressly excluded by the Act from the benefit of the rebate would get it. That is the whole pith of the matter. I am not going to argue the whole case, because it was argued very fully when the Act was passed. It is sufficient to state what the practical effect of the proposal would be for the Committee not to accept it.

Mr. AUSTEN CHAMBERLAIN

I confess I have no recollection of the original Debates on the subject in connection with the Budget of 1909, but I do not think that the statement made by the right hon. Gentleman disposes of the case of my hon. Friend. Let me say at once that against an abuse of any concession which might be made such as the right hon. Gentleman has indicated, I think precautions ought to be taken, and that it ought not to be possible to have a car practically under private contract the whole of the year yet claiming the exemption because it was let under a series of successive contracts, not one of which extended beyond a month. I imagine that it does not pass the wit of man to prevent an abuse of that kind taking place. If there were any difficulty in providing against it by Statute the difficulty must have already arisen. My hon. Friend has mentioned that he based his proposal upon a provision in a previous Act, where a similar limit, but for three months, was imposed. It is clearly much easier to make four successive contracts of three months each than twelve successive contracts of one month each. If sufficient precautions can be taken to prevent abuse under the first, surely they can be taken to prevent abuse under the second. Therefore the Clause cannot be disposed of on that ground. What is the strength of the case my hon. Friend has put before the Committee? I think it is two-fold. I do not think the right hon. Gentleman touched upon them at all. I conceive that the Chancellor of the Exchequer, in imposing the Petrol Tax, intended upon the whole to maintain the same distinctions as were previously maintained between carriages before motor traction came in. I think that was the general line he pursued and which governed him in other concessions that were made. The first point made by my hon. Friend is that this introduces a new distinction, namely, that a man who was entitled to a rebate of taxation when he did a certain trade with a horse-drawn vehicle is not entitled to an analogous rebate of taxation if he now-a-days, in the age of motor vehicles, does his trade with a motor car. I do not believe it was the intention of the Chancellor of the Exchequer or of the House in 1909 to uproot the distinctions which then existed in regard to the taxation and exemption of different kinds of vehicles inter se except in so far as that is necessarily the result of imposing a tax on motor spirit. The second point my hon. Friend made was also wholly untouched by the right hon. Gentleman, and it is a very serious one. My hon. Friend said that whether you get this rebate under the present law or not depends upon the conditions of the locality. That is not justice. I take the statement from him, observing only that the Government have not attempted to answer or to dispute it; but if it be true that a man who happens to have a cab stand in his neighbourhood would get this rebate at present whilst another man situated in a town or a country village where there is not a cabstand cannot get the rebate, though his trade is of exactly a similar kind, surely none of us would defend that or desire to continue it. I hope we may have some specific answer from the Government on these two points—what is the justification for refusing to continue the old distinction drawn under the old Act in the days of horse traction between vehicles doing different kinds of trade; and, in the second place, what is the justification under the new Act for drawing a distinction between two similar vehicles not only on the ground of their different use, but for the simple reason that there is a cab stand in one locality and there is no corresponding public stand for hackney carriages in the other locality.

Mr. HOBHOUSE

The rebate is at present allowed by the Inland Revenue in any case in which it is clearly shown that the motor car in question is let out at all times for the general accommodation of the public upon fixed definite charges, and although not actually on a cabstand it is generally engaged in plying for hire.

Mr. PETO

May I ask the right hon. Gentleman how long that has been in force and have any communications been made to people owning these vehicles acquainting them with the present administration of the Act which is quite unknown to them?

Mr. HOBHOUSE

I do not think it is the obligation of the Revenue Department to communicate this to all persons. It is for persons who think they have a good case to obtain a rebate to put that forward. Upon the other point there must be a very great number of places in this country where, if there be any demand for the kind of vehicle which is wanted for the conveyance of the public at all times, it is not a narrow question of whether it stands on so many definite feet of the roadway which may or may not be called a cabstand, but whether a person hires a vehicle at a particular spot on the road where it is accustomed to stand.

Mr. AUSTEN CHAMBERLAIN

Suppose he finds it in a stable or a garage.

Mr. HOBHOUSE

On that point I must confess myself not clear for the moment. I will make inquiries. The real fact is the immediate readiness of the vehicle to take up, at fixed, definite charges, the public, and convey them to the destination to which they want to go. That is really the distinction which the Inland Revenue draws between the semi-private carriage, which I gather the right hon. Gentleman does not wish to exempt, and the regular public conveyance.

Mr. AUSTEN CHAMBERLAIN

The right hon. Gentleman has made it clear up to a certain point What I am still not clear about, and I think he is not, is whether there is ground for the belief of my hon Friend, on the information supplied to him, that a man who is ready to ply for hire when there is hire, cannot get this rebate unless he can find somewhere to stand outside his premises. Take the case given, of the man who applied for it. It was refused to him, not on the ground that he did not ply merely, but that he did not stand to ply. He can only ply of course when there is a passenger who will engage him, and passengers may be few at many times of the year, but the essential thing is that there should be a public carriage available when a passenger comes along. Then my hon. Friend says his informant told him he actually proposed that he should send his vehicle to the station in order to qualify, and he was told that was not sufficient. What more is there? There is no stand in that locality. If the right hon. Gentleman says in that case the man will be entitled to the rebate, I think he cannot establish it.

Mr. HOBHOUSE

There are always two accounts of any transaction the nature of which has been suggested by the hon. Gentleman and repeated by the right hon. Gentleman. I do not challenge in any way the good faith of the hon. Member, but if the facts are as he asserts it would appear to me primâ facie that this friend has a good cause of complaint, and inquiries shall be made in that particular case. I understand the practice of the Inland Revenue to be that if a car is available at all times for the conveyance of the public at fixed charges, the owner of it is entitled to rebate.

Mr. PETO

I make no secret at all of the place I was referring to. I am speaking of Devizes, and I got my information from there simply because information is more readily accessible in places which one knows. I say, without hesitation, I never heard this new explanation the right hon. Gentleman refers to, and a year ago it was not in force. The facts were exactly as stated. I am not dealing with the case of cars occasionally used for some other private purpose, but I am dealing with the case of cars which are never used for anything except regular letting out in the course of trade, and hitherto, certainly in those cases I have investigated, unless the owner could say that he complied with these definite words, "stand and ply for hire," he could not get a rebate of the Petrol Tax. Even what the right hon. Gentleman said shows that they have entirely altered the definition of what constituted a hackney carriage. The definition in the Act of 1888 is perfectly clear and was only limited by the words that the carriage was not to be let for a period of three months. Now there are altogether new conditions imposed in order to qualify for a rebate.

Question put, and negatived.