HC Deb 19 June 1933 vol 279 cc485-9

(1) If, on an application made in the prescribed manner by the owner of a vessel specified in the application, not being a pleasure yacht, it is shown to the satisfaction of the Commissioners that at any time within the period of six months preceding the date of the application, or within such longer period preceding that date as the Commissioners may in any special case allow, any quantity of hydrocarbon oil, other than light oils, has been used as fuel for the machinery of the vessel while engaged on a voyage in home waters, and that no drawback was allowable on the shipment of the oil, the applicant shall be entitled to obtain from the Commissioners repayment of the amount of any duty which has been paid in respect of the quantity so used, unless that amount is less than five pounds.

(2) Hydrocarbon oil in a bonded warehouse or a refinery, other than light oils, may, on an application made in the pre-scribed manner by the owner of a vessel specified in the application, not being a pleasure yacht, and on the prescribed security being given, be delivered out without payment of duty to the applicant for use as fuel for the machinery of the vessel while engaged on a voyage in home waters.

Provided that at any time not later than twelve months after any oil has been so delivered the Commissioners may require the applicant to prove in the prescribed manner that the whole of the oil, or such part thereof as is not on board the vessel or has not been re-landed with the sanction of the proper officer of Customs and Excise, has been used as aforesaid, and if such proof is not furnished to the Commissioners' satisfaction, any duty which, but for the provisions of this Sub-section would have been payable on the delivery of the oil shall become payable by the applicant on demand made by the Commissioners in the prescribed manner.

(3) If, where oil has been delivered out of a bonded warehouse or a refinery without payment of duty on an application under this Section, any person—

  1. (a) uses the oil or any part thereof otherise than as fuel for the machinery of the vessel specified in the application while engaged on a voyage in home waters; or
  2. (b) re-lands the whole or any part thereof in any place in the United Kingdom without the sanction of the proper officer of Customs and Excise;
he shall be liable to a Customs penalty of treble the value of the whole of the oil so delivered (including the duty payable thereon) or two hundred pounds, at the election of the Commissioners, and, in the case of an offence under paragraph (b) of this Sub-section, the oil re-landed shall be forfeited.

(4) In this Section—

  1. (a) the expression "owner," in relation to an application, includes a charterer to whom the vessel specified in the application is demised, or, in a case where the application relates to oil used, or for use, on a vessel while undergoing trials for the purpose of testing her hull or machinery, the builder or other person conducting the trials;
  2. (b) the expression "prescribed" means prescribed by regulations made by the Commissioners;
  3. (c) the expression "voyage in home waters" in relation to a vessel means a voyage on which the vessel is at all times either at sea or within the limits of a port as defined for Customs purposes under any enactment.

(5) This Section shall be deemed to have had effect as from the twelfth day of June, nineteen hundred and thirty-three.—[Mr. Hore-Belisha.]

Brought up, and read the First time.

3.20 p.m.


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

This Clause represents the fulfilment of the undertaking given by the Chancellor of the Exchequer during the Committee stage with regard to relief from the payment of Heavy Oil Duty on the fuel oil used by coastwise shipping, pilot cutters and ships on trials. My right hon. Friend, during the Committee stage, further promised to consider whether he could include estuarial and harbour craft within the terms of the concession, that is to say, whether tugs and lighters in, for example, the Port of London might also enjoy the exemption given to coastwise shipping. He has decided the matter in the affirmative, and, accordingly, these craft are also included, because, after all, they are really ancillary to shipping.

The reasons given by my right hon. Friend for making this concession were, first, that the tax, if it were allowed to remain upon coastwise shipping and the other categories of shipping which I have mentioned, would affect that shipping detrimentally as compared with its foreign competitors; secondly, that shipping does not enjoy the protection which other in- dustries enjoy; and, thirdly, that the cost of fuel is a heavier item in the case of shipping than, perhaps, in the case of any other industry. The Clause applies to all heavy oils used as fuel for the machinery—whether the propelling or the auxiliary machinery—of a vessel while engaged in a voyage in home waters. A voyage in home waters is defined in Subsection (4) of the Clause as a voyage on which the vessel is at all times either at sea or within the limits of a Customs port. Vessels clearing for foreign ports are, of course, already exempt. The term "Customs port" implies more than the ordinary use of the phrase "port." The whole coastline of the United Kingdom is included within the limits of one Customs port or another; where one ends another begins. Landwards a Customs port extends up rivers to the limits of navigation unless otherwise specifically defined. Therefore, the net result of the use of the term "Customs port" is that the exception will apply to any vessel other than a pleasure yacht proceeding from one port to another in the United Kingdom, going from and returning to the same port, and working within the limits of a port, but it would not include vessels employed on inland navigations.


Would it not apply to canals as a means of going from one port to another?


I have given the definition. It does not apply to inland navigations. For instance, it does not apply to the Thames above Teddington Lock, and it does not apply to inland canals. It does, however, apply to the Manchester Ship Canal, the Caledonian Canal, and the Clyde and Forth Canal, because the traffic on those canals mainly consists of sea-going vessels.


Might I ask the hon. Gentleman, for the sake of greater clarity, whether it would include vessels like tenders, which are ancillary to both coastal and foreign-going shipping? Although they may never leave the harbour, they are absolutely essential to both coastal shipping and foreign shipping.


Certainly; it will include any shipping within the customs port, and I have defined what a customs port is. It does not matter whether they are ordinary coasting vessels or ancillary vessels.


Would not my hon. Friend include the Crinan Canal, which is a short canal between one sea and another, being itself really a part of the sea?


I cannot do that. It is a concession for coastwise shipping and all that can be brought within the ambit of that phrase. Every J kind of craft using a customs port, excluding only those on inland waterways, will receive the benefit of this concession.

As to the machinery for exemption, the Clause provides two alternative methods of relief. By Sub-section (1), if the oil be supplied from duty-paid sources and if no drawback is payable, as it would be if the oil were being exported as merchandise or as ship's stores, the owner of the vessel will be entitled to claim repayment of the duty provided that the oil has been used as fuel in the manner described. No claim for less than £5 will be entertained. That means that, if there be a claim for less than £5, the owner will have to accumulate his claims until they exceed that figure. £5 is made the limit in order to avoid a multiplicity of small claims. The second method of relief is that the oil may be shipped from a duty-free bonded warehouse or installation, and this is the normal method.

The cost to the Treasury of this concession is £100,000, as closely as it can be estimated. The relief covers the whole period since the 25th April, when the duty came into force on the passing of the Resolution. Arrangements are already in force under which oil fuel may be shipped free of duty on an undertaking to pay if the Clause should fail to pass. Where duty has been paid, repayment claims will be made when this Clause becomes law. The reason why the 12th June is mentioned in the Clause is that the arrangements for duty-free issue did not come into operation until after that date, but, nevertheless, the concession will begin retrospectively as from the 25th April. I trust that I have made the purport and details of the Clause plain to the House, and I have every reason to believe that it will be regarded as satisfactory.

3.28 p.m.


I think the House is indebted to the Financial Secretary for the clear way in which he has put the case for the Clause. He skipped over, however, one point in it, and I am beginning to wonder whether the Government are not going to lose some friends, because I notice that the relief is not to be given to the owners of pleasure yachts. I think that the hon. Gentleman ought to explain that point a little further. I rose, however, to ask the hon. Gentleman a very simple question. He said that this relief would not apply to ships and boats plying on canals within this country. While it is obviously true that the vast majority of shipping going from the ports of Liverpool and the Manchester Ship Canal will be shipping that goes far away overseas, there are ships which will ply merely between Liverpool and Manchester, and which, consequently, will not go overseas at all. May I take it that these small ships plying between one port and another on a canal will secure relief in the same way as ships plying in home waters? [A ship coming from Aberdeen to London, for instance, would secure relief, and it would be unfair if that ship secured relief and a ship plying between Manchester and Liverpool, simply because it was plying on a canal, did not get the same kind of relief.] If the hon. Gentleman will be good enough to put that matter a little more clearly, I shall be very much obliged.


The answer is "Yes."

Question, "That the Clause be read a Second time," put, and agreed to.

Clause added to the Bill.