NEW CLAUSE.—(Relief from duty on hydro-carbon oils used for manufacture.) (Hansard, 7 July 1930)

§ Mr. WOMERSLEY

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

The tax on hydro-carbon oils was imposed in the 1928 Finance Act, and the intention was to derive revenue from oil used in internal combustion engines by means of a duty proportionate to their use. It has worked out as a direct tax on the essential raw materials for many important industries. Many of those important industries have to compete in the open market with products manufactured in other countries which have not this tax to pay. At the time this tax was imposed, pleas were made on all sides for exemption in respect to oils introduced for purely manufacturing purposes, and the arguments used against any exemptions of this character were that there would be great difficulty in dealing with evasion. People would claim exemption on account of oil that they wish to use for manufacturing purposes and would then use it for internal combustion engines. As a matter of fact, I believe the experience of the Department in the early days of the tax on these oils was that a considerable amount of expense was entailed in Revenue Officers going round to certify and to find out whether evasion had taken place.

Those who represented the fishing industry made a very strong plea to the then Chancellor of the Exchequer to grant exemption in favour of that industry and, on it being brought to his notice that it was possible so to frame regulations that these questions of supervision, inspection and the risk of evasion might be avoided, he accepted an Amendment which exempted the fishing industry from the tax. This new Clause has been drafted on the lines of the Amendment carried in the 1928 Bill, which exempted the fishing industry. I submit to the Chancellor of the Exchequer that this Clause provides an instrument to enable him to do that which he has already intimated his desire to do, namely, to give relief to those who are using hydro-carbon oils as an essential 196 raw material in the processes of manufacture without entailing a great deal of expense to the Department which has to deal with the matter and without practically any risk of evasion taking place. I heard the Chancellor of the Exchequer say earlier in the evening that many of the new Clauses on the Order Paper were likely to be accepted. I am sanguine enough to believe that this Clause is one which he is going to accept. I do not propose to argue my case any further, because I expect to hear from the right hon. Gentleman that he is satisfied and is going to accept the Clause.