CLAUSE 5.—(Amendment with respect to exemption from railway passenger duty.) (Hansard, 16 June 1921)

§ Mr. MARRIOTT
I beg to move, in Sub-section (1, c), to leave out the words Provided that where a ticket for any journey, whether a single, return or periodical ticket, entitles a person to be conveyed in a class of carriage superior to the class of carriage in which a person holding a ticket for that journey for which the minimum fare is payable is entitled to be conveyed, the fare for the first-mentioned ticket shall not be deemed to be a minimum fare. This Amendment will commend itself to every quarter of the House, and I hope to the Government, because the object, as I understand it, is merely to carry out the object of the Clause, which is to adjust the exemptions of cheap fares as contained in the Cheap Trains Act, 1883, to the recent increase in passenger fares. Under the second Section of the Cheap Trains Act fares not exceeding a rate of one penny per mile were exempted from the duty of 5 per cent. which was imposed by the Railway Passenger Duty Act, 1842. The fares exempted were, speaking generally, the ordinary third-class fares, but the exemption was determined solely by the amount of the fares without any reference to the class in which the passenger travelled. The Committee is only too painfully aware that fares have recently been raised by 75 per cent. The result is that the exemption of 1d. 711 a mile fares may become entirely illusory. So in order to carry out the policy of the Act of 1883, the principle of which is approved by probably every Member of the House, it is provided by this Clause that fares not exceeding minimum fares shall be exempt from the duty. Minimum fares are defined by paragraph (c). For some reason which I am unable to apprehend the definition is made subject to the proviso which I am seeking to omit, that where the ticket entitles the holder to travel in a superior class, the fare paid in respect of him is not to be deemed the minimum fare. That would seem to operate, as I read the Subsection, unfairly in one or two cases. In the first place, the railway companies are in the habit of issuing what are called privilege tickets to their employés, when they want to go away for a holiday, or for other purposes, at one-quarter rate. The fare for a ticket of this character, which entitles the holder to travel in a superior class, may be actually below the minimum rate as defined in this Section. These tickets will, as I read the Subsection, now be subject to duty though they were not subject to duty under the Act of 1882. That is one case in which the Section will operate in a way which could not have been designed by those who drafted it. There is another case. One company under the old Act, I think it was the Great Eastern Railway Company, found it profitable to reduce their ordinary second-class fares to a rate not exceeding one penny per mile in order to obtain advantage of the exemption. These fares will also be subject to duty owing to the proviso which I am proposing to omit.
Unless my Amendment be accepted the inducement to afford convenience—it is more than convenience, it is a great benefit—to the public, will be withdrawn. I find it very difficult to understand why an accepted exemption, a well-established exemption, which is embodied in an Act of Parliament, and has been approved by the policy of this House, should be cut down in the way that it is proposed to be cut down, especially as I am advised that there is very little, if any, money involved in it. I do not think the Chancellor of the Exchequer will be able to say that he expects to obtain much revenue from this. Sub-section (3) says: 712 Nothing in this Section shall operate to charge with railway passenger duty any fares which were not at the commencement of this Act chargeable with such duty. It is very likely that I shall be told that that provides all the protection which I or anybody else can think necessary. This last Sub-section, however, will have a rather remarkable result, which was probably unforeseen by the Treasury. The result will be to leave what are called privilege tickets for a superior class, where the quarter fare come to less than the old one penny rate, still exempt, but such fares will be liable to duty if the fare is anything between the one penny rate and the minimum fare as defined in this Section. Therefore, the only effect of the proviso which I am proposing to omit would appear to be to subject the railway companies to a vexatious obligation in respect of collection and returns without any corresponding advantage to the Revenue. If that be so, I submit that the proviso ought to be omitted.

§ The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal)
My right hon. Friend the Chancellor of the Exchequer has asked me to speak on this Amendment, as it is a railway matter. I differ entirely from the conclusions at which my hon. Friend has arrived at the end of his speech. May I invite the Committee to consider exactly what it is that we are doing? The Cheap Trains Act relieved railway companies of the Railway Passenger Duty on certain conditions. Those conditions were two. In the first place, they were to run a certain number of trains at fares of not more than one penny per mile, which became known in common parlance as Parliamentary trains. Secondly, they were to provide a reasonable number of trains for workmen. The one penny per mile was, speaking generally, the third-class fare. Classes superior to that were left subject to certain duties. When the War altered prices to such an extent that the fares had to be put up, Parliament considered the matter, and in 1917 passed an Act, the substantial effect of which was to suspend the operation of the collection of the Duty during the period of the control of railways. The reason for that is plain. When the State was both paying and receiving, there was no object in keeping voluminous and separate accounts and the companies going through the form of paying over the duty. Clause 5 was introduced by the Government expressly 713 for the benefit of the railway companies. The one penny per mile has gone. It is now 1¾d., speaking generally. We refer to it in this Clause as the minimum fare, and the object of the Clause is to give the companies the same exemption from duty in respect of the minimum fare as they had in respect of the penny fare per mile. The proviso which my hon. Friend moves to delete is necessary in order to secure that the exemption is not extended further than it was before. If hon. Members will look at the wording of the proviso they will see that Provided that where a ticket for any journey, whether a single, return or periodical ticket, entitles a person to be conveyed in a class of carriage superior to the class of carriage in which a person holding a ticket for that journey for which the minimum fare is payable is entitled to be conveyed, the fare for the first-mentioned ticket shall not be deemed to be a minimum fare. In other words, if it entitle the traveller to go first or second class and not third class, then the fare for the first-mentioned ticket shall not be deemed to be the minimum fare. This proviso does not alter the substance of the law from what it was under the Cheap Trains Act. We have had various classes of cheap tickets. There have been week-end tickets, and we may have them again. We have had cheap tickets in the form of season tickets. Those are the periodical tickets mentioned in the Clause. Then there are special tickets for special journeys at reduced fares. Where these special tickets or week-end tickets or other classes of tickets would work out at less than 1d. per mile under the old scale, they were chargeable with the duty because they were first or second class tickets. This proviso is intended to maintain the position exactly unchanged, because these tickets will still be first or second class tickets, even though under a special circumstance the fare is less than the minimum fare. The proviso does not alter the old position at all. It maintains intact mutatis mutandis the old position. If this Amendment is carried, those classes of ticket would for the first time escape duty. The hon. Member says that in the case of privilege tickets issued by railway companies they ought not to have this duty attached to them. My answer is that, in the first place, certain privilege tickets always have paid duty, while certain privilege tickets have not paid duty. My hon. Friend also cited the case of the 714 Great Eastern Railway Company, and said that some special concession they made to their passengers brought them below the 1d. per mile, and now possibly may bring them below the minimum. I do not think so. On these two exceptional cases my hon. Friend moves an Amendment which is so wide in its terms that it would relieve from taxation all the special classes of tickets I have mentioned. In order fully to protect the case which my hon. Friend has in view, these points have been specifically called to the attention of the Treasury, and they have inserted Sub-section (3), which absolutely and fully covers my hon. Friend's case. Nothing in this Section shall operate to charge with railway passenger duty any fares which were not at the commencement of this Act chargeable with this duty. That is to say, a. privilege ticket which before the Act escaped duty will still escape duty. The Great Eastern cheap ticket which prior to the Act escaped duty will still escape duty. I respectfully suggest to my hon. Friend that we have met his point in Sub-section (3).

§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young)
I beg to move, in Sub-section (2), to leave out the words "or taken."
8.0 P.M.
This is a little more than a drafting Amendment, or only so much more that makes it desirable to introduce in Committee rather than on Report. The scheme of the Clause is, as it has been described by my hon. Friend, to exempt from duty fares not exceeding minimum fares. It is made retro-active in Subsection (2) in order to exempt those railway companies which were not retained under control from the time at which fares were raised. In that provision as to making the effect of the relief retro-active, two words have been inserted, 'or taken," which would have the result of refusing this relief to certain companies which have had to pay the duty and, therefore, are entitled to the relief. It is in order to make sure that the extension of the relief shall be to all companies which are entitled to it that we propose to omit these words.