§ 6.3 p.m.
§ The CHAIRMAN
Before I call the first Amendment on this Clause, I would like to propose an arrangement which, I think, would be for the convenience of the Committee in discussing the large number of Amendments which are suggested to this Clause. Those Amendments fall naturally into several different groups, but unfortunately we cannot take them in the order of those groups, Amendments in one group first and then Amendments in the other groups next, because the Amendments in each group come in different places in the text of the Bill. I venture to suggest to the Committee that perhaps we might take the first Amendment that comes, in its order, 1149 and then discuss, on that, all the Amendments having a somewhat similar object. Hon. Members whose names are attached to other Amendments of a similar kind will make their speeches in the general discussion on the Amendment that has been called, on the understanding that their Amendments will not be selected later on unless it be agreed that they shall be moved formally without discussion in order that we may take a decision upon them. Let me tell the Committee what I suggest should be done. We should start with the first Amendment at the top of page 982 in the name of the hon. Member for West Bromwich (Mr. A. Ramsay) which proposes, in page 6, line 4, at the beginning, to insert the words:Save in the case of such fuel oils as may have a viscosity of seventy-live seconds and over.I am not an expert in these technical terms, and I am told that that Amendment has reference to the particular use to which the oil can be put. That applies to most of the Amendments on page 983 of the Order Paper. It would apply to most of those on page 982, except that they are out of order. Hon. Members will understand that the Amendments which have regard to different special purposes for which the oil is used, whether it is in the shipping and coasting trades, manufacturing and industrial purposes, jute textiles or the manufacture of asphalt or asphalt products, all fall into one group. My suggestion, therefore, is that on the first Amendment called, all the different uses of oil in respect of which it is claimed that there should be special privilege, should be discussed, and such Amendments as are in order can be called in due course for the purpose of a Division only, and not for the purpose of discussion. The Committee might like to know from the Chancellor of the Exchequer or from the Financial Secretary to the Treasury whether they think that that would be the most convenient way of conducting the discussion.
§ 6.7 p.m.
§ Sir BASIL PETO
Before the Chancellor of the Exchequer speaks, may I say one word on this point of Order? I quite agree to a discussion on the uses to which the oil should be put in general cases, but there is such a special case for the exemption of the oil for use as 1150 fuel for the coastwise and shipping trades that it stands entirely by itself. It is possible that the Chancellor of the Exchequer may be inclined in that case to make a concession which would not be applicable in other cases. The arguments for those two trades are entirely different from the general argument, and I ask you whether in conducting the discussion you could not call one of the Amendments, of which there are several on the Paper dealing with the consumption of oil by vessels engaged in those trades. There is one in my name which stands at another point. I ask that one of these Amendments, whichever one you think most proper, and raising a specific point, may be called, in order that we may have a discussion.
§ The CHAIRMAN
May I, in regard to that, go a little further? The hon. Baronet the Member for Barnstaple (Sir B. Peto) has raised this question, but I would have raised it later. The particular group into which falls the Amendment that I shall call first is the group dealing with use, to which I have already referred. Secondly, there is the group with regard to deferment of the date of the duty. Then there is another group in regard to shipping. I think that group would include the question of coastal traffic. There is at least one Amendment which I have marked as in order relating to ships and dealing with the coastwise traffic, and I suggest that the hon. Baronet's Amendment would come under the group of Amendments relating to ships to be discussed later on.
§ Sir B. PETO
Do I understand that we are to have one Amendiment called to raise the question of coastal shipping, and to have a decision on that point?
§ The CHAIRMAN
Yes. My intention is to see I that all these questions are adequately discussed, and further, where the discussion covers a group of different industries or something of that kind, there should be a Division, where necessary, on every definitely separate Amendment. My difficulty is that if each Amendment is discussed there will be such an immense amount of overlapping that the Committee will find it a little difficult to follow the discussion.
I think that the suggestion that you have made will very much facilitate our discussion. The Gov- 1151 ernment are anxious to have a discussion in such a form as will enable all the points to be discussed that hon. Members desire to raise. The grouping of them in the way that you suggest will enable us to have a general discussion which will cover a number of Amendments, and then it will be possible to divide on any one that hon. Members desire.
§ Colonel WEDGWOOD
It would considerably facilitate discussion if the right hon. Gentleman had made up his mind on these questions, and could take the earliest possible opportunity of saying what the Government have decided. Otherwise, the discussion may be interminable. The best way of facilitating the passage of business would be to know what the Government have decided.
§ Sir STAFFORD CRIPPS
I am sure that it will be very good to have the Amendments grouped in any convenient manner. You, Sir Dennis, did not say anything about such Amendments as the last one on page 982 in the name of the hon. Member for Aberavon (Mr. Cove)— in page 5, line 10, to leave out the words "seven pence," and to insert instead thereof the words "seven pence halfpenny"—as falling in any of the groups which you mention.
§ The CHAIRMAN
I am sorry, but in dealing with the question of shipping I forgot to mention that group. The next group would be the one dealing with the rate of duty.
§ Sir S. CRIPPS
There is another point as to an Amendment on page 984. Is that considered to come into the same class as the one to which I have referred on page 982? It is dealing with a different point, and I am not quite certain which class it will fall into. It proposes, in page 5, line 10, at the end, to insert the words:provided that this section shall not apply to oils for use as fuel in any plant installed and in use prior to the twenty-fifth day of April, nineteen hundred and thirty-three.
§ The CHAIRMAN
I have that Amendment marked as one of those which fall into the group "use," and therefore to be discussed with the first Amendment that I shall now call.
§ The CHAIRMAN
On four groups. Now that we have got so far, may I say exactly what Amendments I suggest should be discussed? I propose to call that which stands at the top of page 982 in the name of the hon. Member for West Bromwich (Mr. A. Ramsay), to which I have already referred. The Amendment in the name of the hon. Member for Govan (Mr. N. Maclean)—in page 5, line 4, to leave out the words "six o'clock in the evening of"—is out of order. The next one in the name of the same hon. Member—in page 5, line 5, to leave out the word "April" and to insert instead thereof the word "November"—comes into the next group, and therefore would not be discussed now. The Amendment in the name of the hon. Lady the Member for Wallsend (Miss Ward)—in page 5, line 8, after the word "consumption," to insert the words "subject to the provisions of this Act" is introductory, and therefore with it must be discussed another Amendment in her name much later on the Paper. The rest of the Amendments on page 982, with the exception of the last two, are out of order. One in the name of the hon. Member for Broxstowe (Mr. Cocks) —in page 5, line 9, after the word "shall," to insert the words "except where the oils are not for use as fuel"— will be discussed now. The; one in the name of the hon. Member for Aberavon (Mr. Cove)—in page 5, line 10, to leave out the words "seven pence" and to insert instead thereof the words "seven pence halfpenny"—will come later, in another discussion. The first Amendment on page 983 in the name of the hon. Member for South Bradford (Mr. Holds-worth)—in page 5, line 10, to leave out the words "seven pence" and to insert instead thereof the words:such sum as would be equivalent to a tax of 10 per cent. on the landed value of such oilswould be discussed later in a group relating to weight of tax. The second in the name of the hon. Baronet the Member for North Cornwall (Sir F. Acland) —in page 5, line 10, after the word "pence," to insert the word"halfpenny"—would be covered by a previous Amendment. The next five would be discussed on the present Amendment—in page 5, line 10, at the end, to insert the words: 1153other than oil used for h4at production for industrial urposes."—[Mr. Holds-worth."]other than oil used for power production."—[Sir R. Hamilton.](except in respect of oils having a viscosity of seventy-five seconds and over)."— [Mr. A. Ramsay.]but where any oil other than light oil is used as a fuel in any hospital equipped prior to the twenty-fifth day of April, nineteen hundred and thirty-three, with apparatus especially designed for the use of such oil, the rate of rebate shall continue to be eight pence per gallon."—[Captain Fraser.]other than oil used in the jute industry."—[Mr. Dingle Foot.]The next Amendment, in the name of the hon. Member for East Birkenhead (Mr. White)—in page 5, line 10, at the end, to insert the words:other than oil used as a fuel by a vessel proceeding from any port or place in the United Kingdomwill come under a group "ships" and therefore will not be discussed now. The others on page 883, in the name of the hon. Member for Cardigan (Mr. O. Evans)—in line 10, at the end, to insert the words:other than oil used in the metallurgical processes set forth in the Ninth Scheduleand in the name of the hon. Member for East Birkenhead, in page 5, line 10, at to end, to insert the words:except for consumption by vessels belonging to or chartered by a harbour authority and used solely for the purposes of, the harbour. The expressions 'harbour authority' and 'harbour' shall have the meanings, respectively, assigned to them by the Merchant Shipping Act, 1894,will be discussed now. So we get to the second Amendment on page 984 in the name of the hon. and learned Member for East Bristol (Sir S. Cripps)—in page 5, line 10, at the end, to insert the words:Provided that this section shall not apply to oils for use as fuel in any plant installed and in use prior to the twenty-fifth day of April, nineteen hundred and thirty-three.I hope that that is fairly clear. I am calling the first Amendment, and, later, the other Amendments in the same group will be moved formally, without a discussion.
§ The CHAIRMAN
I think there are, but I am really trying to reduce them to two. Most of those on page 984 relate to use, but they refer to Excise and not to Customs, so I will take that as a special sub-group in its due course.
§ Sir B. PETO
Would it be convenient to indicate which Amendment will raise the question of coastwise shipping?
§ The CHAIRMAN
I do not think it would be convenient to go into that, because it would come under the later heading of ships. At any rate, it would not come in this group; it would definitely come in a later group.
§ Colonel WEDGWOOD
May I ask whether the Chancellor of the Exchequer will make a statement on this first Amendment?
The right hon. and gallant Gentleman is asking me to pronounce judgment before I have heard the case.
§ Colonel WEDGWOOD
The right hon. Gentleman must have made up his mind, and I want to know what attitude he is taking on this first Amendment.
§ 6.17 p.m.
§ Mr. ALEXANDER RAMSAY
I beg to move, in page 5, line 4, at the beginning, to insert the words:Save in the case of such fuel oils as may have a viscosity of seventy-five seconds and over.With regard to this tax on fuel oil, my task, Sir Dennis, is much simpler than yours. I do not know how necessary it is, but it may be for the convenience of the Committee if I attempt to define a little more definitely what this Amendment means. As hon. Members probably know, oils are differentiated according to their specific gravity—their weight or density—or their viscosity, as the case may be. In the case of a light oil, the viscosity may be, say, 20 seconds, and in the case of a very heavy oil it may be as high as 400 seconds. The figure of 75 seconds embodied in this Amendment differentiates the class of light oils from the class of heavy oils, and it is a well recognised point of differentiation in the trade. Those engaged in the fuel oil industry know, of course, exactly what is meant by a viscosity of 75 seconds; and the British Engineering Standards Association, who define standard oils, 1155 know exactly what is meant by this figure, but by way of parenthesis may I say that, if the Chancellor of the Exchequer felt inclined to accept this standard of measurement, I have no doubt that, from the legalistic point of view, he would desire to pursue it a little further, and describe it as 75 seconds as measured by Redwood's No. 1 viscometer—which is the technical method of measurement—at a temperature of 100° Fahrenheit. For the broad purposes of this discussion, however, the Committee will, I think, accept the generic description of "75 seconds" as differentiating between light and heavy oils.
I would like briefly to point out to the Committee what the effect of this differentiation would be. If the Chancellor of the Exchequer were to accept the Amendment as it appears on the Paper, the effect would be that the lighter oils, such as kerosene, various classes of lighter lubricating oils, and the light oil used in the high-speed Diesel oil engine, would all be subject to the tax, but the heavier oils used for fuel purposes in a manufacturing establishment—for instance, for the heating of tube furnaces, or for boiler purposes—would be exempt from the scope of the tax. The Amendment, therefore, would draw a line exempting from the tax the manufacturing interests, and, incidentally, the users of heavy Diesel oil engines, and leaving within the scope of the tax the users of lighter fuels such as those I have mentioned. I know that a great deal of interest is being taken in this question, and I do not propose to abuse the indulgence of the Committee by speaking too long about it. That means that I do not propose to generalise except to mention that, as hon. Members are aware, a very considerable propaganda has recently been carried on by the coal industry against the remission of this tax on fuel oil. I do not think that the coal trade has in the House of Commons a more ardent supporter than I am myself, and I have on many occasions and in many seasons endeavoured to advance the interests of that industry; but in my view the coal industry has no right at this juncture to come to the Chancellor of the Exchequer and to the House of Commons and ask them, by means of discriminating and penal legislation, to do for the coal trade what the coal trade has not been 1156 able to do, by its own initiative and research, for itself.
The truth is that fuel oil has very special and well denned uses, just as coal has, and I am certain that, the Chancellor would be doing a very great disservice to manufacturing industry, and also to the whole progress of scientific development in this country, if, merely for the sake of supporting one industry, he were to exercise repression on. the proper and scientific development of other industries. I want to test this Amendment, if the Committee will bear with me, by referring to the effect that it would have on certain specific industries. Surely all hon. Members, when we are proposing to put on a tax or to remit a tax, will want to know what effect the proposal is going to have on the manufacturing life of the country, which, after all, is the foundation of our whole economic structure. Clause 6 of the Bill, in its last paragraph, exempts from the ambit of the tax asphalt and substances of that kind which are solid or semi-solid at a certain temperature. I know what a solid substance is, but I am not so sure that I know what a semi-solid substance is. The Chancellor of the Exchequer is providing that asphalt substances coming into this country shall come in tax-free, but he appears to have forgotten that we not only import asphalt substances, but we manufacture them; and, in the manufacture of asphalt substances from our native products, we have to use large quantities of oil as a fluxing material. A number of factories engaged in this home manufacture from home materials, and using this imported oil merely as a part of an incidental process, will have to pay not less than £12,000 a year extra on their imported fluxing material. The effect of that will be simply this, that the Chancellor of the Exchequer will get his £12,000, which, at the best, or the worst, according to the point of view, will go on to the cost of the home-produced article, while the foreigner who is sending asphalt into this country will get a present on his imported material to the extent of that amount of money each year.
We produce also in this country bituminous substances for road dressing. They are produced from oil—from the very roughest, crudest and cheapest oil, the technical name of which, I believe, 1157 Is "Top Crude," costing about £2 a ton. That oil is distilled, and, as a result of the distillation, you get the bitumen which is sold for road surfacing. I am not in a position to say whether that will escape as a semi-solid product; it seems to me that it may; but, if it does not, what is going to happen? Here again is a native industry, employing English labour, and, on the raw material of that industry, it will have to pay a tax of over 50 per cent. I am certain that the Chancellor of the Exchequer cannot have visualised the position from that point of view when he conceived the tax, and I have every confidence that he will now take steps to ensure that the matter is put right.
When we come to the more intimate bread-and-butter industries of our manufacturing areas, what do we find? I do not propose to go through the whole range, but only to mention one or two. Take the bolt and nut trade. I can speak from a very long personal experience, because, as a boy, I started using an oil furnace myself 30 years ago. That industry, and ancillary industries, have been using this heavy, crude oil as a part of the primary basis of their manufacturing operations for 30 years, tax-free, and now the Chancellor of the Exchequer is proposing to put on to this fuel, which has been proved for many years to be essential to these industries, a tax equal to about 33 per cent. of the fuel costs. It is very difficult to go into the Midlands or the West of Scotland, where these standard, staple industries are carried on, and explain to British manufacturers why, after 30 years' operation, they are now having to pay a tax which is going to raise appreciably the cost of their product. In the black bolt and nut trade, which is only a sectionised industry, this tax, on a 60 per cent. basis of production, is going to cost £25,000 a year; it is going to put 1.38 per cent. on to their selling prices, at a time when their export trade has dropped, in six years, from £950,000 to £230,000. Here is a staple British industry of long standing, which has been fighting for its life Since the end of the War, hanging on by the skin of its teeth, and is now having 1.38 per cent. gratuitously added to the cost of its final product. I venture to suggest that the Chancellor of the Exchequer will have good grounds for ameliorating that condition.
1158 I do not want to argue unnecessarily from the particular to the general, because it is always dangerous to do so, but I would like to give to my right hon. Friend two very simple cases of hardship under these proposals. After all, the great structure of British industry is built up by units, and, unless these units can be safeguarded and kept sound and healthy, something will go wrong with the structure itself. I have here the case of a small man, away out in the country—not a wealthy manufacturer with great Capttal resources behind him, but a man in a comparatively small way, making bricks. He gets in a certain amount of money, and invests £1,250 in an oil engine and an oil installation. Now he sees this tax coming along, and, working in a small way with a very small margin of profit, if any, he 1s going to find his fuel bill increased by £3 a week. I have another case in which a man recently started making enamel for ironware, a trade which was until comparatively recently in the hands of the United States of America—imported stuff. This man is prepared to take a risk on his skill and enterprise and initiative, and he puts down £4,500 worth of new plant, with oil as its basis. He finds that under this Budget his fuel bill is going to cost him £10 a week more than he contemplated a month ago.
I should like to take my right hon. Friend to another industry of considerably greater importance, that is, the glass industry. That is another active industry which, Since the War, has gone through seas of adversity. How it ha3 managed to hang on I cannot tell, but it has survived. Under this Government it has had the protection of a 20 per cent. tariff, and it is prospering. It has discovered new lines of manufacture. It has improved its efficiency and got new foreign markets because it has been up-to-date. It has been able to do that because the central characteristic of the new era of production in the glass trade has been oil. A turnover of £3,000,000 per annum has been produced by means of oil fuel. That turnover will have placed on it by means of this tax an additional burden of £100,000 a year for fuel. It means nearly 5 per cent. on their annual profit. It is going not only to militate against the effect of the protection they have had, but it is going seriously to pre- 1159 judice them when they come to try to sell their goods in the export market.
One can go round the world among the manufacturing trades and the same story is told. There is one particular industry that does not get protection. It is still having to buy its raw material from' Belgium and Germany. It is still having to pay on that raw material 33⅓ per cent. for the benefit of the steel producers, and for my right hon. Friend. On top of this imposition, which they have resented tremendously and which has made many enemies for the Government in the Black Country, they are now having to pay 33⅓ per cent. extra for their fuel. They are quite seriously asking themselves, employers and workpeople alike, why they should be penalised in such an extraordinary degree.
There are two other new branches of industry which deserve the good will of the Government, and not a tax. They are the makers of Diesel oil engines and the makers of fuel-burning apparatus. It is only recently that the Diesel oil engine came into the country and now engineers, by looking ahead and taking a chance, have adapted it to their own purposes and have made good. The Diesel engine is a thing that is coming. It has a well-defined place in our engineering life, and you cannot put it back. Exactly the same considerations apply to the makers of oil-burning apparatus, at one time a German and an American trade and now an English trade, and we are beating them at their own game. We find that, having gone ahead, having shown enterprise which is a credit to British craftsmanship and design, their reward is that their enterprise is to be taxed by 27 per cent. of their fuel cost.
This tax, as applied to manufacture and power, is a retrograde tax, an ill-conceived tax, one that is entirely out of keeping with the sentiments and needs of the times in which we are living, and one that ought to be dropped altogether. I am not going to be content even if we hear that the tax is to be applied only in a modified form. We are creating a new precedent. We are upsetting standards which have obtained for 30 or 40 years. Although the Chancellor has put on only a certain unit of taxation to-day, how do we know that next year, or two or four years hence, that unit is not going to be radically altered, to the 1160 disadvantage of industry? It is that uncertainty, that not knowing what your fuel is going to cost you next year or the year after, which will militate against the extension of what would be a great advantage to all our producers, namely, power and heat, with fuel as the basis, on a scientific footing. I would beg the Chancellor to consider whether this Amendment does not give him the way out. After all, he has got another £500,000 from the co-operative societies, Let him open his heart. By doing so he would persuade manufacturers that this Government, which came into power with so much good will and so much authority, is not, in relation to manufacture, a mere tax gatherer, but that it has at heart the interests of our manufacturers, upon whom in our economic structure depends a great deal of the well-being of the people of the country.
§ 6.38 p.m.
§ Mr. KIRKWOOD
I have the greatest pleasure in supporting the Amendment, not only on behalf of the engineers of Britain, but of the working class generally. If this tax is allowed to go through, it will hit one of the best developments that we have had in our time as far as engines are concerned. There are two ships in Scotland, the construction of which has been held up as the result of this threatened tax, one at Ardrossan, the other at Leith. It is going to put back the hands of time as far as the building of marine engines is concerned. That is a very serious matter for engineers. We are right up against it. We have been doing everything we possibly could to get work for our men. The Government, stopped us getting work in Russia and here is another action of theirs stopping work. This is not helping the country. It is doing the very opposite. It is throwing more people out of employment. The firm of Beardmore has been experimenting with Diesel engines on a small scale for a couple of years. They have now produced a Diesel engine small enough to be applicable for propelling omnibuses on our public highways. This means work for thousands of engineers. It will cheapen and revolutionise transport. It is one of the greatest things that have yet been effected. After all these years of experiments this firm has just got the engine into working order. They have 1161 proved to the entire satisfaction of the Glasgow Corporation that it can do the job satisfactorily.
§ Mr. H. WILLIAMS
On a point of Order. Shall we be entitled to argue the case of the Diesel engine on an Amendment which will still leave1 the fuel of the Diesel engine taxed? I know it is a very technical point, but the Amendment does not, in fact, exempt the Diesel engine oil from duty. It does not seem proper that we should argue something which will not arise.
§ Colonel WEDGWOOD
Captain Bourne, did not your predecessor say origiNaily that we were to discuss all questions of use on the Amendment, and is it not, further, the fact that this particular viscosity includes the abatement on Diesel engine oil?
§ The DEPUTY-CHAIRMAN (Captain Bourne)
I understand that it is a de-bateable point whether, in fact, oils of this viscosity can or cannot be used in Diesel engines. I am not an expert, and I do not propose to express an opinion upon it. With regard to what the right hon. and gallant Gentleman the Member for Newcastle - under - Lyme (Colonel Wedgwood) has said, the understanding, as I heard the Chairman rule, was that we should take a general discussion on the Amendment on the use of oil.
§ Mr. KIRKWOOD
I can assure the hon. Member that, if this Amendment is accepted, I shall be quite satisfied, and so will those who are interested in the Diesel engine. He is always posing as the greatest living authority in Great Britain, France and Ireland. His great anxiety is to be a member of the Government, but I can assure him that he is not going to be included.
There is another way in which this affects us. The Diesel engine has been introduced into a great many factories. In my constituency we have been faced with a tremendous amount of unemployment owing to so little shipbuilding being done. We have been doing what we could to bring new industries into our constituencies. We have been successful in Clydebank in establishing a biscuit factory which gives employment to nearly 500 young men and girls. They have put down a Diesel engine, which has given great satisfaction. If this tax goes on, 1162 it will be quite impossible for this firm to compete with the other great firms, not only in Scotland but also in England, and it will throw those wham we have got in work back among the unemployed. I know for a fact that the Chancellor of the Exchequer has been inundated with letters from people who are able- to tell him how this matter is affecting our industry throughout the length and breadth of Britain. I leave the matter to his own good sense.
§ 6.45 p.m.
§ Sir ROBERT HORNE
I understand that by your Ruling, Captain Bourne, we can embark upon a very general discussion of fuel oils, and I should like to extend some purely general considerations to the Committee before an opinion is arrived at upon this subject. It is obvious that if any import duty of this kind is put upon any commodity which is in use in industry, it will create hardship. Everybody would admit that at once. I imagine that we are not so far away from our discussions upon the various import duties which were imposed in this country under our new tariff system that we cannot remember now to recall vividly the great complaints made with regard to almost every duty put upon a particular commodity. These things must be so. It does not matter what is the commodity upon which you put a tax, somebody suffers and somebody complains. Always you are able to urge that somebody is to be put out of employment because of the harsher conditions under which the industry must then be carried on. We cannot come to definite conclusions simply upon such narrow considerations as these. We must, indeed, have regard to the general interests of the whole country. I sympathise deeply with the complaints made by many different industries using oil engines to-day. I realise their difficulties. I can see at once that in some industries, where the cost of oil is a large part of the charges upon production, it must work out in very harsh measure. On the other hand, I see some complaints which appear to be very much exaggerated, but I am not prepared in any way to resent such suggestions to-day. I admit the case of those who would rather not have a duty upon oil than have a duty.
1163 There are one or two considerations which seem to be worth our attention. It is said, for example, that to put a tax upon oil, and in view of a reversion to the use of coal, is to take a reactionary and backward step. That is a view from which I entirely dissent. The future of mechanical propulsion does not lie at all with oil. If I read aright the scientific prognostications which are being made at the present time, coal is coming back to its own again, and, indeed, so far from oil being the propelling agent in the future, those who are looking farthest ahead tell me that propulsion will be done on gas, and that that will be before many years are over. I am also informed by those knowledgeable people to whom I appeal that not many years will have passed before everybody will carry a cylinder of gas on his motor car instead of having to fill up his motor tank with petrol. The future is with coal, and not with oil. Therefore there is no ground upon which it can be said that it is to force this country into reactionary methods, which other countries have long ago given up. I am told that to-day Germany, which has probably gone in for more scientific investigations into these matters than any other country in the world, is quite convInced that it is useless now to try to produce economically what they so long desired to do, namely, oil from coal by hydrogenation processes, and that in the future we really must look to gas as the cheapest method by which vehicles shall be propelled or engines driven.
The difficulty in this country at the present time is that gas is too dear, but that difficulty arises very largely from the character of our legislation. We have imposed so many restrictions and limitations upon gas companies with regard to the means of distribution that they are not able to give large quantities of gas to the large consumers at a price at which they could readily supply gas. They are bound by the restrictions which compel them to supply gas to the largest consumer at the same rate per unit as to the person who takes almost none at all! When we have got rid of these difficulties, I have not the slightest doubt that we shall see a great advance in the country in the use of gas rather than of oil. It may well be that with regard to the people who use oil engines, 1164 there will be as great a complaint made that they are left in the lurch because of the advance of science. Already one company in the vicinity of Sheffield which has special powers with regard to the use of gas has set up the kind of grid which is already well known in Germany, and will be able to supply gas at a very economical price to anybody wo can use it for power purposes. Do not let us get misled by the idea that we are taking a reactionary step in doing anything which will restrict the use of oil.
It is said in a great many instances that to turn from oil-using machinery to machinery which, for example, can be used with coke as fuel would be costly to the industry. I have no doubt that that is true in many cases, but it is not true in all cases. We must not exaggerate that difficulty. Many instances have already been given. There was a notable instance given in the "Times" the other day by a man who had put what he suggested into practice. He converted his oil-using machinery to coke-using purposes, and he found that in the first two years he had saved enough, because of the cheaper price of coke as compared with that of oil, to pay all the costs of his conversion. I believe that in some instances the costs of conversion are even cheaper than that. Therefore, we must not exaggerate that argument either.
§ Mr. KIRKWOOD
I should like to ask the right hon. Member for Hillhead (Sir R. Home) if he is aware of the fact that Beardmores got a cruiser from the Government in order to experiment with gas and that it turned out to be a gigantic failure? And not only that, the Beardmore firm have spent fortunes in trying to develop the gas engine on the lines suggested and have scrapped the entire output.
§ Sir R. HORNE
That may be an individual instance, but I do not think that my hon. Friend, if he really reads the modern literature upon the subject, will come to the conclusion that it is the general experience. The greatest possible advance has been made in gas. The last and the main consideration which I venture to put before the Committee this afternoon is as follows: The hon. Gentleman the Member for West Bromwich (Mr. A. Ramsay), who opened the discussion 1165 and made a very able, eloquent and interesting speech upon the subject, said that was was proposed now was without precedent. I really cannot entirely follow that point of view. It is certainly not without precedent in this House that we have been protecting some of our main industries. If this protection which is being suggested this afternoon, if it be regarded as a protective duty, is in favour of coal—
§ Sir ISIDORE SALMON
Will the right hon. Gentleman inform the Committee what commodity we have protected to the extent of 40 per cent.?
§ Sir R. HORNE
That, after all, is an argument upon the amount of duty and not upon the principle, which is the only question upon which I am now arguing. I would only remind my hon. Friend that if we put a duty of £l per ton on oil at the present time, it may be within his recollection that Germany defends its coal trade by a duty of £10 a ton. If we are making an innovation in this respect, we are certainly not exceeding what has been done by Germany. Suppose you were having boat-loads of coal delivered into this country, would not the claim of the coal trade for a duty be irresistible? What is this duty? It is a duty upon a commodity which is as much the competitor of coal as any cargo of coal which can be landed in this country. [HON. MEMBERS: "No !"] Undoubtedly. The argument which is put against it is that a duty upon oil would compel them to go back to coal. Undoubtedly it is the coal trade which suffers most severely from the imports of oil into this country. Of all the industries in this country coal is certainly second to agriculture in importance. Moreover, the coal of this country is the greatest, and, indeed, the only natural asset we possess. We cannot imagine anything which would do this country worse detriment than if coal became quite useless, or so expensive in comparison with other commodities that it could not be employed. It would ruin this country.
If there is any trade in this country upon which we must depend, it is coal. Is there an industry which employs a larger number of people except agriculture? We know of the distress in the coal districts. I sympathise with the 1166 hon. Member for Dumbarton Burghs (Mr. Kirkwood) when he talks about 1,500 people being thrown out of employment if those oil engines were scrapped, but look at the vast number of people who are walking about idle in the coal districts to-day for lack of employment. If I were asked as to the necessity of finding employment in any industry, coal would be the first, and the iron, steel and shipbuilding industries would be the next. Surely, if there is anything that we should try to benefit to-day by such legislation as we can pass, the coal industry is at least one of the most deserving of the industries of our country.
The importation of oil, undoubtedly, is doing the coal trade a very considerable injury. I find that 200,000 tons of oil are being' imported into this country at the present time for domestic heating purposes and for the heating of trade offices, and, surely, if we are really planning for the industries of our country, that is madness. We ought to be employing our native asset, giving work to our own people, for heating those places. They can be heated as efficiently by coal as by oil. We put no great hardship upon the oil industry which is heating those buildings in asking them to pay a penny a gallon simply to be allowed to come there. Not only is this 200,0000 tons a matter to be kept in view, but the position is still worse when we consider that the amount has risen by 55,000 tons in the course of a single year. There is one of the things which damages the coal industry. What have we been doing here during the last fortnight but struggling in trade agreements to get some outlet for our coal. For the sake of a million tons, which Germany is going to take from us in the course of the next few years, we have given away duties, and large numbers of industries are undoubtedly going to feel the difference. This is not a principle any different from that. While I agree that there are people who will be hurt, and while I sympathise with those whose difficulties are increased, I nevertheless feel that, looking to the broad general interest of this country at the present time, and its trade taken as a whole, this duty which the Chancellor of the Exchequer proposes is fully justified.
§ 7.1 p.m.
§ Colonel WEDGWOOD
We have listened to the coal trade, and I presume we shall listen to the electricity power owner, and the gas owner. The coal-owner, I am bound to say, when speaking of "our" coal, would carry more conviction to me if it had been our coal and not his coal.
§ Colonel WEDGWOOD
I withdraw. But I see he is a director of Samuel Hodge and Sons, Limited, pulverised fuel and fuel specialists. The suppliers of the fuel are telling us that their fuel is better than any other. We shall have in the course of this Debate everybody interested in supplying the market. I put it to the Committee, and the Chancellor of the Exchequer, that the people best able to judge are those who have to eat the pudding—not those who supply the ingredients. It is the manufacturers who are the best judges of what they want, and what they have to pay. Let me draw the attention of the Committee to this, that the principal consumer of fuel in this country is the Navy. Every one of the arguments the right hon. Gentleman has put before the Committee— convincing arguments—has been considered by every Board of Admiralty for years past. Every Board of Admiralty has been asked by colleagues in the Cabinet to "give coal a chance" and "go back to coal." In spite of that the Admiralty has stuck to oil, simply because they think it best for their purposes; because they think it is not fair to turn the British Navy into a C 3 navy. If that argument carries weight with the British Board of Admiralty, it must carry the same weight with the captains of industry in this country.
§ Mr. SLATER
May I remind the right hon. and gallant Member that the Admiralty have recently given an order to a firm in this country for fuel oil produced from British coal?
§ Colonel WEDGWOOD
If we are to go back to the use of coal, and if the Admiralty are going to do that, the price and the excellence of the result must be satisfactory. The right hon. Gentleman 1168 knows all about coal, and it may be that in years to come they may produce pulverised fuel, gas or oil from their coal as cheap as our present fuel and better. When that comes about, -I would say to the Chancellor of the Exchequer: "Now do this dire deed on imported oil." Until that day comes, let him join with me and sympathise with the manufacturers who are the best judges of what they want. I have a letter from a firm of manufacturers which is typical of hundreds I have received in recent days. This is from a firm of provision merchants in Bristol. After all, even provision merchants use oil very largely. This firm says:We were aghast when we heard of the Chancellor's imposition of one penny per gallon on crude oil. We are of opinion that this tax will drive hundreds of manufacturers quite out of busmess. Many thousands of pounds of manufactures have been sold by us on a certain basis of cost. A tax such as that now imposed involves most horrible losses which cannot be recovered. The harm which this tax will do, in creating unemployment, will far offset any revenue obtainable.Allowing for a certain amount of exaggeration, manufacturers may have sold forward for a year. This tax unexpectedly falls upon them and upon people who are perfectly legitimately carrying on their business—particularly on those people who, desirous of making production as cheap as possible, use the best inventions, and get the best plant for competing in the markets of the world. I have to point out that I am not speaking on this matter from a selfish point of view. I had better explan that my largest holding in the firm of Josiah Wedgwood has been five £10 shares, and the largest amount I received from them is £7 10s. I have never spoken from the point of view of financial interest. What I put forward is in the public interest, and nothing but the public interest.
I am terribly afraid that the Chancellor of the Exchequer—I know him so well— is putting off his answer. I know what that means. It means he is going to allow us to blow off steam, and state our trouble, and then say to us: "You can state your case to the Import Duties Advisory Committee." Whether in this House we are stating our case or not, we are stating public principles We cannot afford a Chancellor of the Exchequer with a parochial mind. This is not a question of any one industry; it is a question of 1169 the Chancellor of the Exchequer of England affecting all the industries of England—coal, fuel, electricity, power, oil, everything. On thi3 question it is not our duty, or right, to hand over the destinies of the manufacturers of this country to any statutory body, where a decision will be taken on the lines of the details of the case made out by a particular industry. Rather it should be decided on broad lines by this Committee. I think everybody in the Committee will agree that this is a question where broad lines come in. Even the right hon. Gentleman the Member for Hillhead (Sir R. Home) was rather staggered at the idea of a 40 per cent. duty.
§ Colonel WEDGWOOD
The broad issues are things such as that—whether a new tax of 40 per cent. should be imposed, without notice, to any industry. The weight of the tax is a thing we ought to discuss and make up our minds upon, and not leave it to any Import Duties Advisory Committee. Then comes the question of whether we should put a tax on raw material. The Committee must realise the enormous difference there is between taxing raw material and taxing the finished article. There are taxes on steel billets which are really raw material, taxes which are very much complained about. But I would call attention to this, that before this Government came in, and while the Tariff Reformers were still struggling in the wilderness, they drew up, under the expert guidance of one of the Members for Birmingham, a cast-iron scheme in which duties varied from nothing on haw material up to a considerable amount on the finished article. Duties were worked out in detail. The Government did not think of anything being done by anybody else and started out on a line of their own. There was a considered decision of all the skilled Tariff Reformers in this country, and they left out of the duties raw material.
§ Colonel WEDGWOOD
The right hon; Gentleman the Member for Sparkbrook (Mr. Amery) will correct me if I am 1170 wrong, and, even if I am wrong, it is very probable. The difference between taxing our raw material and the finished article is this, that if you have a tax on raw material you are adding to the cost of production in this country and making it impossible for the manufacturer in this country to compete with the manufacturer in another country where raw material is not taxed. It is a question of first principle. You levy your lower tax on the unfinished article in order that manufacturers in this country may still continue to compete in the neutral markets of the world. That is a strong argument for not imposing this particular form of protective tariff in order to benefit the coal industry.
This is not only a very heavy tax—twice as heavy as the ordinary tariff of the country to-day—it is also a tax on raw material. The right hon. Gentleman will say it is not raw material; it is merely fuel. It is no use chopping logic whether it is fuel or raw material. The question is what will it mean in the cost of production; what does this taxation mean as an addition to the cost of production of the article? This is a new overhead charge added to the cost of production and, consequently, it is immaterial to the manufacturer whether that addition to the cost of production is on his steel, a raw material, or on his fuel. If you charge an extra £l,000 upon him he does not care whether it is for glass, borax or his fuel—it makes exactly the same difference. It is so much per cent. on the cost of production. If it adds to his cost of production the first thing he has to consider is: "Can I put up my price to meet the additional cost."
Four main considerations have to be taken into account—(1) the rate of the tax, (2) that it is a tax on raw material, (3) that it adds to the cost of production and (4) can the manufacturer pass the tax on? Let us consider what happens in an ordinary case where the rates go up. Perhaps I had better, as I am speaking to the present Chancellor of the Exchequer, take the more exceptional case of when rates go down. The Chancellor of the Exchequer, when he occupied another position in the Government, took off three-fourths of the rates on factories and all the rates on machinery. That was held at the time by Members 1171 of this House, and particularly by those engaged in business, as being the best thing that could possibly happen for manufacturers here. What was the immediate result? Every manufacturer said: "This means so much off my cost of production. This means £500, £1,000 or £l,600 a year less in my costs of production. I can, therefore, afford to sell my goods abroad at lower prices, and if I have competitors in this country all our prices will come down accordingly." The benefit of that reduction in the cost of production was all passed on to the consumer, in so far as it was subject to a universal relief applying to everybody in the country.
What about the present tax? Can the manufacturer pass on the tax by putting a higher price on the article? In some cases he can. In some cases the consumer will have to pay but, unfortunately, this tax is only on one special sort of fuel, and in so far as rival manufacturers are not taxed and selected manufacturers are taxed it means that you cannot pass the tax on. The manufacturers subject to the tax cannot get a higher price than he is getting at the present time, subject to the competition of other forms of fuel. This tax is a partial tax levied upon some but not upon all manufacturers. If it was levied on all fuels then, certainly, in the home market prices would go up, but because it is limited to one fuel no manufacturer using that fuel will be able to pass the tax on to the consumer or get a higher price for his goods. That is sound economics. There may be variations but on general principles we may take it that unless a tax is universal it cannot be passed on. So far as the foreign market is concerned, if you ask any manufacturer at the present time, who is fighting like a tiger for British trade abroad, to add to the cost of his goods in order to please the National Government, well, he would sooner have a Labour Government. Manufacturers in this country are not children. They are trying to get back British trade. They are doing it in regard to the Diesel oil engine, as the hon. Member for Dumbarton Burghs (Mr. Kirkwood) pointed out. Germany, who used to be ahead of us as regards the Diesel engine, now takes second place, because they pursued in Germany the same silly policy of 1172 putting a gigantic duty on fuel oil, in order to encourage something else.
The proposed tax has another vice, and it is our duty to prevent that vice being grafted on to it. It means that the tax in the Majority of cases will rest entirely upon the businesses that use that particular fuel. It will fall entirely upon the ordinary shareholder, whereas preference and debenture shareholders will get off scot free. The rentier class will be untouched. The only people picked out for punishment are those on whose enterprise depends the whole future of British trade. You pick out a selected class of the trading community to tax, and you pick out the very man you ought to be encouraging if you really desire to restore British trade and industry.
There are a whole series of general principles upon which this Committee ought to decide, but the right hon. Gentleman is going to say to us later: "You have stated your case, and you must now state it to somebody else—the Import Duties Advisory Committee." Who is going to state it? It will not be me. It will not be stated on general principles. It will be stated by each man asking for something for himself and trying to conceal from the others that he is going to get it. It is a wrong principle. I do not care whether it is the manufacturers or the coastwise traffic or the Diesel oil engine people, they all have the same case, that this tax is unfair in weight, that it is a tax on raw materials, that it is a tax which cannot be passed on, and that it falls solely on the enterprises that use this particular fuel. In spite of what the hon. Member for Bournemouth says, this is a tax which must penalise at least one line of experimental research and affect permanently the recovery of British industry and our ability to compete with every intelligent experimenting nation throughout the world. I beg the Chancellor of the Exchequer to treat this as a national question. We on this Committee are the experts on this question. No person who has not been in the House of Commons can possibly understand economics as we do here. I beg the right hon. Gentleman to show that Birmingham, which is so much interested in all these new lines of manufacture, can also supply some original ideas on matters of political economy.
§ 7.22 p.m.
§ Miss HORSBRUGH
I intervene very briefly, because I have already stated the incidence of this tax on the oil used in jute manufacture, which is different from other oils in that it is not used as fuel and that it is not in competition with coal, gas or anything else. I refer to the oil used in the jute industry in the process called batching. I think I am right in saying that jute is about the coarsest fibre that we spin, and because of that fact a greater degree of oil is needed to treat the fibre before it can be manufactured. The jute industry is entirely dependent upon that particular oil, and an increased cost would be very hard on an industry which is struggling for life at the present time. The difficulty is that there is nothing else to substitute for the oil and that no application to the tariff board could help in any way, because the competitor is not a foreign country. Our competition comes from India, and therefore there is no import duty allowed on the jute goods imported from India. I will not keep the Committee further at this stage but will merely plead the case with the Chancellor of the Exchequer for this particular trade and for exemption for the oil used in the industry, because it is different from all other cases for which oil is used.
§ 7.24 p.m.
§ Mr. GRAHAM WHITE
Having regard to some observations made in the Debate I should like to say that I am not a coal-owner, or a shipowner, or a maker of pottery, nor am I interested in any way in any trade that will be benefited or dis-advantaged by this particular tax. I should like my right hon. Friend to deal with the matter as a question of general principle. My right hon. and learned Friend the Member for Hillhead (Sir R. Home) reminded us that we were not so far removed from the discussion of the Import Duties Act and similar Measures that we have had to consider from time to time, but he had forgotten the arguments which were relevant to this discussion, how some people were disadvantaged and others hoped to gain, and the Government hoped that, on balance, the result would be good. The Chancellor of the Exchequer in first speaking on this Measure reminded us of that. He said that one of the reasons, and perhaps the Major reason, for introducing this tax was the fact that it was to remedy an anomaly 1174 and that this fuel had not been taxed before. There are accidents and accidents, and most of them are misfortunes, but when we have a fortunate accident which is of great advantage to a large number of struggling manufacturers, who are much concerned in trying to meet foreign competition, and when it is an accident which has enabled the most progressive people in the country to bring their methods and plant up to date, it is an accident that we might very well leave where it is rather than alter it merely for the sake of removing an anomaly or making our tariff system symmetrical.
I do not think anyone will quarrel with what my right hon. Friend said with regard to the gas industry and its future development. In Germany and elsewhere a very great deal has been done scientifically in the development of the gas industry. The right hon. Gentleman said that we might in a short time be going about with cylinders of gas in our motor cars. His recollection of the War time is probably as clear as mine, and he will remember that we went about with balloons of gas on our cars. This is an important matter. Whatever may happen in regard to gas in the future that lies in the future, and we hope that it will do all the great things which science can develop and that it will be of the greatest service to our manufacturers. The vital thing to-day is that our manufacturers are trying to bring their plants up to date, and they ought to have the very best plant that is available, but the imposition of this particular tax will mean a very serious set-back to many of the most modern plants. The glass industry has been instanced by one hon. Member. In confirmation of what he said, I am told that in the glass industry in particular the incidence of this tax will just make the difference as to whether or not that industry will be able to hold the new foreign markets which it has obtained. That is a very serious consideration.
The hon. Member for West Bromwich (Mr. A. Ramsay) dealt with many industries and pointed out how widespread the incidence of the tax would be. I cannot think that the Treasury or the Chancellor of the Exchequer had any idea when they launched this tax how wide its repercussions would be. Speaking on the Budget Resolutions, the Chancellor of the Exchequer said that he did not pretend to have great knowledge on this particular 1175 subject, but he hoped as the Debate proceeded views of hon. Members would be expressed. The hon. Member for West Bromwich might have increased his list. I am having letters from all over the country pointing out the serious effect this tax will have upon industry in general. The right hon. Member for Hillhead spoke on behalf of a great national industry which we all desire to help, but according to the information I have been able to collect the Majority of people who are using oil fuel will, in no circumstances, go back to coal; they cannot go back to coal. That is an important point which must be remembered. It is a liquid and for reasons of cleanliness and control of heat 90 per cent. of the present users of oil fuel cannot, in any circumstances, go back to coal, and whilst we have every sympathy with the coal industry and with the miners, and are prepared to support anything in reason which may help them, the arguments in regard to the use of coal have been considerably over-stressed this afternoon.
Let me come to more general considerations in regard to the trend of British trade in relation to this tax. When you put on a tax it is impossible to see its repercussions, even at short range, still less at long range. The Diesel engine position in Germany has been referred to, and it is relevant to point out that 12 years ago when the manufacture of Diesel engines was being developed in Germany there was no tax on this fuel, and this and similar engines in Germany were coming into general use. The German manufacturers created a demand in their own market, were thus able to reduce their own charges, reduce the cost of their engines and command a considerable measure of overseas trade. They put a heavy tax upon fuel oil, and the result is that Germany has lost her supremacy in the manufacture, which is coming to this country. We ourselves now have a complete mastery of the export trade in this particular type of manufacture. It has been a feature of British industry during the last 25 years that we have been somewhat slower than other countries in adopting new industries. Take the Argentine as an example. When the people in Buenos Aires, in these modern times when new luxuries have been coming in, wished to have refrigerators 1176 put in their home they got them from Sweden; carpet sweepers they obtained from the United States of America, wireless sets from Amsterdam and gramophones from, America. Having a limited amount of money to spend and wishing to have these modern inventions they naturally had less to spend on the staple manufactures of this country, upon which we were still relying. Fortunately we are beginning to catch up and develop these new industries.
The Chancellor of the Exchequer would not, I am sure, wish to impose a selective tariff; and it is inherent in the situation of industry that this tax must be selective. And it must select those industries which are most up-to-date, and which are making every effort to bring their plant up-to-date. May I remind the Committee that there are some countries which have not been so ill-advised as to tax this particular kind of raw material? The Scandinavian countries are practically free from a tax; Holland is free. In Belgium the tax is only light, and in France they have adopted a duty of 15 per cent. ad valorem. They are not so stupid as to handicap themselves by imposing a tax.
§ Mr. WHITE
It is very much less than the tax now proposed. I oppose this tax on general principles. It is contrary to the interests of industry. It is a selective tax. It is a tax upon progress, which is the most serious kind of taxation in these rapidly moving days. It will bring in some revenue I have no doubt, but I am convInced that it will bring in no revenue which can compensate for the injury it will do.
§ 7.38 p.m.
§ Mr. ALAN TODD
I do not propose to detain the Committee for more than a few moments, but I should like to say that I agree with the hon. Member for Birkenhead (Mr. White) that this tax will hit the most progressive manufacturers. In my own constituency there is a glass industry, which it will affect to some extent; and if the Chancellor of the Exchequer were to come down to Birmingham at the present moment and visit Edgbaston he would know what that district thinks of the Government in connection with this tax and also in con- 1177 nection with the German Trade Agreement as well. This glass industry is a very old industry, and it has had a great deal of difficulty in keeping up-to-date, but it has done its best under very difficult circumstances. There is no doubt that this tax will, at the present moment, affect the conditions of this industry in a most serious way. Therefore I hope the Chancellor of the Exchequer will see his way to take it off. The right hon. Member for Hillhead (Sir B. Home) has dealt with the case of the gas industry and has said that the future of industry in this country depends largely on what happens to the gas industry. He also said that this tax will benefit the coal industry, but we have had no figures to show how the coal industry will benefit. The right hon. Gentleman, to whom we always listen with great attention, might have given us some figures showing how the coal industry and the gas industry will benefit; if we had had them it would be easier for those of us who are supporting the Amendment to agree with the proposal of the Government. The Amendment will not seriously interfere with the coal industry. I had a letter to-day from a coal federation in my own division, and the first reason they gave for supporting the tax was that it was put on because it was a pure accident, an anomaly, that this particular importation had escaped a duty altogether, because the Import Duties Advisory Committee were unable to deal with materials which are normally subject to duty. That may be so, but, on the other hand, on many occasions manufacturers have done well because they have taken the opportunities which have occurred. I hope the Chancellor of the Exchequer will reconsider this matter, and take the advice of many manufacturers, who must have come to him and told him that it was a tax which ought not to be imposed at the present moment. It will cripple new industries which are doing their best under difficult circumstances.
§ 7.42 p.m.
§ Sir S. CRIPPS
I only propose to detain the Committee for a moment because the main argument which we want to advance will be put forward on a later Amendment to the Bill. I entirely agree with the right hon. Member for Hillhead (Sir B. Home) that we must look at this problem from a national point of view 1178 and not from the point of view of any particular industry. He has spoken of the future of coal, pulverised coal I presume he means, and gas as the new motive power. He reminded me of some of those gentlemen whom I meet in my professional capacity, the patentee who always comes forward with the latest device and assures one that within 24 hours the world will be converted to it. It is a long cry before there will be any substitute in the form of gas in this country for fuel oil. The process may have begun, but it will be a long cry before it gets all over the country. We are dealing here with the coming year, the financial and industrial effect of this tax in the coming year. As far as other substitutes for fuel oil are concerned, such as pulverised coal, that has been a potential substitute for many years, but for obvious reasons it has not been adopted instead of fuel oil. It is not suitable for many purposes for which fuel oil is used.
The right hon. Gentleman seemed to think that the effect of this tax will be to make people immediately reconvert their furnaces from fuel oil burning furnaces to coal burning furnaces. That may be possible in a few isolated instances, but in many cases it is quite impossible, not only from the point of view of the cost, but from the point of view of the class of heating that is required. Indeed when one comes to such things as the Diesel engine it is completely out of the question. There can be no question of their going back to coal. If one deals with all the other uses of fuel oil for manufacturing purposes, and such uses as one sees mentioned in later Amendments, one realises that no home-produced article at the present time can compete with fuel oil. It is quite true that there is a quality of oil produced in this country which is similar to fuel oil, but it is not available in quantities to replace the imported oil. The result is that, although the tax might have some effect in preventing further people converting from coal to fuel oil, it cannot have any effect in the case of people who have already converted. That is the reason for the Amendment in the name of some of my hon. Friends, suggesting that so far as installations for fuel oil have been made up to the date of the intro- 1179 duction of the Budget, they should not be penalised.
I hope the Chancellor of the Exchequer will tell us what object there is behind this tax. Is the policy to try to stop further conversion from coal to fuel oil in order to protect coal from any further encroachment by fuel oil? One can quite understand that as a bit of national policy, and if properly planned in association with many other things it might be a desirable thing to do to help to develop home resources. Or is the policy of the Government an attempt to get people to reconvert their furnaces back to coal? If that is the policy it really is a vain policy. In practice it would not be a possibility. If the right hon. Gentleman's policy is merely to stop further conversion, clearly he ought to give some consideration to people who have already converted and are now tied to fuel oil. In that event the only effect can be to penalise them in what must be considered to be a raw material, though whether technically it is a raw material or not does not matter.
Especially in regard to the export trade one would have thought that the tax would be contrary to the interest of the country as a whole. So far as the amount of money to be obtained from this duty is concerned, the duty clearly cannot be a matter of any great importance compared with the industrial effect that it may have. I have no doubt that the Chancellor of the Exchequer is glad of every million that he can pick up, but I am also sure that if he felt that a large class of manufacturers were being penalised or affected in their costs and their competitive power abroad by reason of their having converted to fuel oil and being unable to reconvert, he would then reconsider the matter, anyway so far as the present installations are concerned. So far as such industries as the Diesel engine industry are concerned, that surely must be a matter to be taken most seriously into account. It is an industry which, in spite of the forecast of the right hon. Member for Billhead is going to play a very large part in the future. That being so, it must be a matter of prime importance as to whether we encourage the use of that engine in this country. Moreover, if in future we are to be able to produce fuel 1180 oil in this country, the more engines that will burn it the better.
§ 7.50 p.m.
§ Mr. HOROBIN
I shall speak for only a few moments, especially as the right hon. Gentleman the Chancellor of the-Exchequer was good enough to listen at some length to arguments that were put to him when this matter was put before him by a deputation. I rise for one prime purpose, and that is to deal with certain arguments used by the right hon. Member for Hillhead (Sir R. Home)— arguments which may, quite unwittingly, have misled the Committee. The right hon. Gentleman made reference to the gas industry as a competitor of oil. I entirely concur with him in what he said as to the quite illogical and almost disastrous hindrances that Parliament has put on the proper development of the gas industry, hindrances which are causing gas fuel to be much more expensive than it need otherwise be. The fact remains that at the present time gas is three times as dear as oil. It is no use to say to struggling manufacturers that some day legislation will be altered, and some day they will be able to get gas as a competitive fuel. I take leave to doubt whether in the immediate future, even if legislation was amended, gas would become really competitive. However that may be, gas legislation is not being altered now.
§ Sir R. HORNE
My point was that it had been suggested that anyone who stood up for this duty was a reactionary and taking a backward step. I pointed out that there was something much more forward than oil, which was the derivative of coal.
Mr. HO ROBIN
Like all other interventions in the middle of an argument that is beside the point. The point is that you are putting a tax now upon oil, upon one competing fuel. It is quite useless to consider the effect of the tax in relation to circumstances which are not here, which may arise in the future or may not. Considerations of what may happen later are irrelevant. In actual fact the only real competitors to be considered are gas and oil. It is useless to consider this matter in relation to a possible effect on coal. There really is no direct competition between oil and coal. It would be as rational to consider 1181 the possibility of going back to charcoal burning in the smelting of iron. A great many of these processes never have used coal. They have grown up because the oil fuel has become available to manufacturers. The point I want strongly to make is that if this proposal would have the effect of cheapening gas there would be a very much stronger case for it. But it makes gas dearer. It will cost the gas industry between £200,000 and £300,000 a year.
§ Mr. H0R0BIN
It is true that the gas industry welcomes these proposals. Who would not? It is going to cost them £200,000, but their main competitors something in the neighbourhood of £1,000,000. Of course the gas industry like it, and I do not blame them. It is going to put a very heavy burden on their principal competitors and a small burden on them. But from the point of view of the consumer of these fuels, and of the British manufacturer, the only true up-to-date fuels that he has before him are both to be made dearer. I hope that that point is clear in the minds of Members of the Committee, because it is vital. What we have to consider is not the competitive position of these two fuels, but the position of the British manufacturer when he is trying to put into use either of the two really up-to-date fuels at his disposal. This is protection run mad. There may be some argument for protection which says, "If we protect you you can become more efficient. Under the shadow of protection you will be able to launch out and put into operation more up-to-date methods"; but what can be said for the statement, "No, no, that is not the argument. What we say is that you will be able to sting the consumer to such an extent that we can compel you to go back to methods which were abandoned long ago because they were inefficient and uncleanly."
This proposal is ill-conceived. You cannot force industry to turn from an up-to-date fuel to an out-of-date fuel. You can compel particularly the new trades to go from the country where fuel is made artificially dear to the country where fuel is naturally cheap. For these reasons I beg the Chancellor of the Exchequer to reconsider this duty, which I 1182 cannot believe that either a Free Trader or a Protectionist would really consider to be sound or worthy of consideration by a Parliament mainly elected to help the modernisation of British industry.
§ 7.58 p.m.
§ Mr. MANDER
I quite agree with the statement of the right hon. Member for Hillhead (Sir E. Home), that we must take a national view of this matter. If the Chancellor of the Exchequer had gone to the trades of this country and had said that in the national interest he was going, after a certain passage of time, to put on a moderate duty, they would have received it in the right spirit and there would have been none of the very keen and bitter antagonism that there is in certain parts of the country to-day. I hope that the right hon. Gentleman will look at the matter from that point of view when he comes to reply, The right hon. Member for Hillhead referred to the effect on employment, and said that what weighed with him was the increase of the coal industry of this country. But it is no use putting more people to work in the coalfield if at the same time you are putting out of work as many or more people in the export trade of this country. That is what is likely to happen.
I rise merely for the purpose of putting the point of view once again of the industries in the Black Country, which are very deeply concerned, regardless of party. Let me give one or two examples. One of the most important industries in the Black Country is the bolt and nut industry. There are 70 members in that trade association, and it is calculatel that the new impost will cost the trade £25,000 a year at the present rate of manufacture, while at the 1930 rate, to which they hope to get back, it would cost £40,000 a year. A statement was made by the chairman of that association to the effect that it would cost his-firm £20,000 to change back to coal burning. That is one of the cases where such a change would be possible. Another trade which is widely spread throughout the Black Country is the drop forgings industry. The association of that trade calculates that an addition of £25,000 a year to their expenses would be involved in this proposal. A good deal of that trade is export trade, and there is very keen competition. In the 1183 opinion of the manufacturers who know the situation best this taxation is going to make just the difference between holding those markets and losing them. They feel that it will involve seriously increased unemployment. The hon. Member for Kingswinford (Mr. Alan Todd) has referred to the glass industry and I need not go into that further.
It is interesting to note that in certain factories the employes have been asked to express their views on changing back to coal where such a change is possible. They have unanimously expressed their concern and their hope that they will not be asked to return to conditions of that kind. There is the well-known difficulty of efficient furnace control if coal is used instead of oil, and there is an increase in the amount of ash and dust in the air supply which renders conditions for the workers unhealthier than they are where oil is used. There is no doubt that throughout these industries in the Black Country, Since the introduction of oil, there has been an improvement in health conditions which is greatly appreciated by the workers, and anything which would tend to a setback in that respect, would be resented on the human side in industry apart from its other effects. In many cases reconversion is not possible. Coal is not an effective alternative. The point has already been made that this taxation discriminates against the progressive manufacturers, the very type whom we want to encourage. One of the most progressive firms in the bolt and nut trade writes:We were one of the first firms in the world to adopt oil for furnaces over 40 years ago. In busy times our consumption has exceeded 350,000 gallons a year. You will readily realise what the tax would mean to us. We changed over from coal for two special reasons, first, because oil was so much cheaper than coal, and secondly, because the furnaces are only one quarter the size of the coal furnaces, thereby saving much valuable works space.The Chancellor of the Exchequer said if it were found that, as a result of the tax, certain manufacturers were placed in a difficult position in regard to foreign -competition, they could go to the Import Duties Advisory Committee and ask for increased protection. I admit that in certain cases that argument might have a certain validity, but obviously it has 1184 no application to articles which come under the recent trade agreements. The hollow-ware industry, for instance, if placed in a worse position, cannot go to the Import Duties Advisory Committee because the protection which they have has been reduced to 20 per cent. from 25 per cent. at a time when they were expecting an increase to 33⅓ per cent., and it has been reduced for a period of years. There is no way out for trades of that kind. I hope the Chancellor of the Exchequer will be able to indicate in what direction their salvation lies. I asked the right hon. Gentleman, in view of the many difficulties which have now been brought to his attention, and which he admitted previously he had not been able to investigate properly owing to the necessity for secrecy, to consider some alleviation, perhaps in the direction of a postponement of the duty or an indication that it will not come into operation for a year or so, and then at a lower rate. Many of these manufacturers, if approached in that spirit, while deeply regretting any increased impost, will feel, from a patriotic point of view, less inclined to resent the situation. I appeal to the right hon. Gentleman to endeavour to meet their difficulty.
§ 8.7 p.m.
§ Sir WILLIAM DAVISON
There are three classes whom I shall describe as public servants, who are anxious that the attention of the Committee should be drawn to the serious effect which this tax will have upon them. These are water companies, hospital administrators and owners of flats and hotels. What they complain of, like other users of these heavy oils, is the suddenness of the imposition and its partial effects. As chairman of the Water Companies' Association I would point out that this taxation will add to the expenditure of water companies many thousands of pounds a year which will ultimately have to be put upon the consumers of water. The company of which I am chairman recently installed Diesel engines manufactured in this country. This proposal means that our expenditure will go up from 65s. a ton to 85s. 5d. a ton, an increase of 30 per cent. A memorandum from another water company in another part of the country states:The combined output of our stations recently became insufficient and the running of several stations was uneconomical… 1185 We have recently replaced our plant by modern diesel engines delivering a greater supply of water…of greater purity. This cost £146,000 and to change back is quite out of the question. The proposed fuel oil tax will also mean additional expenditure of between £300 and £400 a year.There is the further point that the Diesel engine has recently been developed in this country and is a most promising British industry. For a long time only German and American engines could be obtained. The East Surrey Water Company have recently put in British Diesel engines, which are., if anything, superior to engines of foreign make.
With regard to hospitals, in the case of one hospital in my constituency, the cancer hospital, this tax will cost £900 a year. It may be said that this is not a very large sum, but it is a very serious thing to hospitals in these days, and I am told that in the case of St. George's Hospital the cost will be £2,000 a year. If my memory serves me right, the hospitals of the country consume something like 20,000 tons of heavy oil in the year, and therefore this taxation involves a serious additional imposition upon them. With regard to the third class I have mentioned, I have a great many letters from proprietors of hotels and flats in my constituency pointing out that oil is so much cleaner than coal, that it is practically a necessity nowadays. They have in many cases only recently used oil fuel for heating, and it will increase their expenses very considerably. One firm which owns three hotels state that their annual consumption of fuel oil is nearly 1,000 tons per annum.
Here, again, the complaint is of the suddenness of this imposition. These people had no reason to suppose, when they put in oil-burning plant, which is not only cleaner and more economical but takes up less room, that this imposition would be placed upon them. Furthermore, they are placed at a disadvantage with some of their competitors by having to provide for this large additional fuel expenditure, and they suffer this disadvantage by the mere accident that this unforeseen tax now falls upon them and does not fall upon firms which are still using other forms of fuel, such as coal. I ask the Chancellor to bear in mind the position of these three classes—whom I have described as servants of the public 1186 because they all give service to the public in various ways—who are all seriously affected by this proposal
§ 8.14 p.m.
§ Dr. O'DONOVAN
I would like to direct the attention of the Committee away from the oppressively commercial atmosphere in which this subject has necessarily been discussed hitherto, and to reinforce the claim of the hon. Member for South Kensington (Sir W. Davison) that the Chancellor should give special consideration to the hospitals in this time of difficulty. I have no doubt that this tax has been carefully measured by the experts of the Treasury, but I should be happier in my mind if I knew that the right hon. Gentleman had sought and obtained information from the Ministry of Health as to whether or not this tax will be a hindrance to the proper development of hospitals in England.
Apart from the financial aspect, which is a matter for hospital managers, there is an aspect of this question which appeals to the medical profession. The fewer people there are employed about a hospital the greater the attention that can be given by the administrators to the work of the hospital. Where oil fuel is used the administrators are not bothered with the payment and management of and the responsibility for those who have to take in and store coal and stoke the furnaces. If that side can be cut away from hospital administration, the proper work will receive more attention from the committees and the administrators. It is obvious that the less smoke we have about the place, the less dust, the more will the modern hospital be a temple of healing and the less will it resemble a modern factory. Hospitals are so big that the problems of heating, lighting, disinfection, and washing almost make the hospital in its lay aspect a miniature factory. If oil fuel is developed more, then that factory aspect of hospital life will be diminished, to the very great satisfaction of the doctors. I have no adjectives at my disposal to apply to the Chancellor of the Exchequer. How he has maintained his composure under the many adjectives that have been thrust upon him during this Debate, I do not know. It is a lesson to us all in equanimity, but when the time comes for him to reply, I hope 1187 he will devote a few of his well-considered remarks to the medical aspect of oil fuel in hospital life.
§ 8.15 p.m.
I should like to support the Chancellor of the Exchequer on behalf of my constituency It seems to me, listening to this Debate, that the prosperity of the whole of British industry must definitely depend on the use of oil and, mark you, of foreign oil. We should indeed be retrograde if we considered that foreign oil was absolutely necessary to the efficiency and prosperity of British industry. There axe very few things that are being done by oil at present that could not equally well be done by gas, electricity, or pulverised coal. There are some things perhaps, but they are very few, that could not be done with some product of coal. The right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) referred to the pottery industry. It is an extraordinary thing that at the present time there is being used in that industry annually 834,000 tons of coal and coke-that is, apart from the consumption for power raising—and it is beyond question that the industry produced the finest porcelain long before oil was ever used at all.
My hon. Friend the Member for Kings-winford (Mr. Alan Todd) talked of the awful effects of this tax upon the glass industry. That industry at the moment is using 595,000 tons of coal a year, as against 100,000 tons of oil. Furthermore, I am told that a combination of producer gas and town gas is used more extensively in the industry than oil. Those figures do not seem to bear out the hon. Member's argument. The right hon. and gallant Member for Newcastle-under-Lyme referred to the question of the Navy using oil or going back to coal, and he said he would welcome the day when the Navy used oil produced from coal, but surely what the Chancellor of the Exchequer is proposing is to encourage and to foster the production of oil from British coal. This tax will definitely give that assistance, and we in this House have to look upon this question from a national standpoint. We have to face the question whether we are willing to allow our national asset, one of our biggest primary industries, simply 1188 to fade out of the picture, and the answer to that question by every Member of Parliament, whether he represents an industrial area or whatever kind of constituency he represents, will be, "We certainly do not wish the coal industry to fade out of the picture."
Members on all sides who are opposing the Chancellor's proposal have said, "I am willing to do anything I can for the coal industry," but when they have the opportunity of doing something really vital to assist our coal industry, they definitely oppose this effort. I welcome-the effort of the Chancellor of the Exchequer to assist this great industry that I represent. In my view there is no industry in the country, unless it be agriculture, that is more worthy of assistance. We have a great unemployment problem in the coal industry, and surely this proposal will vitally affect employment in that industry. We do not expect that all these concerns will revert to coal—that is not altogether the idea of these proposals—but we do contend that if the industries that are now using oil will use gas or electricity, it will indirectly assist the coal industry.
We have spent millions of pounds on-a grid system in this country in order to bring cheap electricity from the North of England to the South. I am told that one of the reasons why we do not get cheap electricity is that we do not use enough, but surely, if we get something to encourage the use of electricity, it will enable it to be obtained more cheaply, and we have to remember that practically all the electricity in the country is generated by coal. I wish to support the efforts of the right hon. Gentleman the Chancellor of the Exchequer to assist the coal industry and to give employment to British miners, and I appeal to the Committee to take the broad view the big national view, and not to prevent something being done that will save the coal industry from extinction.
§ 8.21 p.m.
§ Sir ROBERT HAMILTON
I must confess that I was rather surprised at the tendency shown by some hon. Members to regard this Debate as though it was a question of coal versus oil. I would rather look upon the problem as one of seeing that the country makes the best use of the best material at its disposal, and if anything is done in the way of 1189 taxation that interferes with the user of that material and handicaps our manufactures, I think it is a great misfortune. I rose only to refer to one aspect of the question, which so far has not been touched on, and that is the very large extent to which the oil engine is used in purely rural areas. The hon. Lady the Member for Cannock (Mrs. Ward), who has just sat down, referred to the difficulties of agriculture at the present time. I think it may perhaps astonish hon. Members to realise how very largely oil engines are used in purely rural districts, for all manner of purposes, on the farm, in saw mills, in quarries, and in all sorts of ways. From information which I have been able to obtain, I understand that 75 per cent. of the oil engines in existence are in rural areas, and that fact will enable hon. Members to understand to what extent oil is being used in purely rural industries.
Surely, where oil engines are used in rural districts, it is because they have not the chance of using electricity?
§ Sir R. HAMILTON
Not necessarily so. The oil engine is used because it is found the most effective and the cheapest, and I may also remind the hon. Lady that there are many parts of the country, one of which I have the honour to represent, in which you cannot possibly use coal. We have to use oil for our purposes. Coal, electricity, and gas are not so easily available all over the country as some people imagine, and where the oil engine has been installed and has proved its usefuiness and its cheapness, surely nothing should be done to handicap the user of that oil. I am told that if this tax is imposed it will cost the users of these engines in rural areas something between £100,000 and £130,000 a year. You may say that that is not a very large amount, but if you were a user of an oil engine in a rural area, you would find that your expenses had been very considerably increased. If that engine were used for purely agricultural purposes, it would be a great pity at the present time if the expenses of the farmer were increased. I thought it desirable that the Chancellor of the Exchequer, who I have no doubt is by this time somewhat surprised at the information which he is receiving from all quarters of the Committee, should not 1190 be left without this small portion of information which I have been able to give him.
§ 8.26 p.m.
§ Sir I. SALMON
I was a little surprised this evening to hear the right hon. Gentleman the Member for Hillhead (Sir R,. Horne) make a statement with regard to the necessity of protecting coal. Does not the Committee realise that what the Chancellor is asking us to do-is to put a tax of 40 per cent. on the cost of heavy oil but to protect coal to the extent of 60 per cent. It is important that the Committee should realise that those who are speaking strongly in favour of coal are asking to have coal protected to the extent of 60 per cent. I am entirely in favour of doing all that we can in a practical way to help the coal industry. On the other hand, we must have a sense of proportion. The hon. Member for Cannock (Mrs. Ward) said very lightly: "Let us generate heat by electricity." I am afraid she has very little experience of the cost to industry of raising heat for steam by electricity. This is a difficult problem for the Chancellor of the Exchequer, and we want to, consider whether he has in his mind the idea that he wants to protect the-coal industry or to balance his Budget. I feel that the method he is proposing will not help to balance the Budget, because there is a large proportion of the industries in this country that cannot possibly revert to coal whatever the tax on oil might be.
Although we want to do the best we-can for industry, and although I am a great supporter of tariffs, I certainly think that it is overdoing tariffs to protect an industry to the extent of 60 per can. That is not fair to indusry. In flour mills, bakeries, hotels and hospitals, where they use oil fuel, it is largely done to prevent noise, dust and smoke. The real problem is: Is it fair and is there-any precedent for any industry to have such a penal tax of 40 per cent. put upon the cost of its material? We have had many Debates in the House about taxation, and we have always tried, in taxing for protection of industry, to take a reasonable view. To tax oil by £10s. 5d. a ton is the equivalent of 40 per cent. on the cost of oil,. and it protects coal by 60 per cent. That figure is easily checked, for- 1191 it requires one-and-a-half tons of coal to raise as much steam as is raised by a ton of oil because coal has not the same calorific value. The Chancellor of the Exchequer should give serious consideration to this problem, not from the point of view of its effect on one industry, but from the point of view of its effect on industry generally.
This is a tax that will be rather difficult to transfer, even to the consumer, except in the case of the bakery industry. It is possible there because flour costs so much per sack and the effect of the extra cost of oil can be calculated. The effect will be that certain commodities will go up because there is an increased cost to-day of all sorts of materials; there is an increased cost not only of heavy fuel oil, but of transport. All these extra items will necessitate in certain industries increased prices. My experience of increased prices is a reduction of trade. If you reduce trade you automatically reduce staffs, and, instead of helping the country by putting more people in employment, you will do a great disservice by throwing a number out of work. I suggest that the Chancellor should consider this problem from its widest aspect and from the point of view of industry generally. I hope that he will see his way, if not to do away with the tax, at any rate, to put it at a more reasonable figure.
§ 8.33 p.m.
§ Mr. BANFIELD
I want to add my plea to the many that are being made for some reconsideration of this tax. The bon. Member for Cannock (Mrs. Ward) pleaded that industry as a whole should go back to coal. I suggest that that is an absolute impossibility and an unreasonable thing to ask. It is impossible at this time of day to put the clock back. If repetition is the art of propaganda, I must repeat the plea which I have already made once or twice in the House. I want to draw the Chancellor's attention to the condition of the Black Country industry. The right hon. Gentleman knows the position in the Black Country of the nut and bolt industry and the tube industry. Here we have an industry which has used oil for many years. It is no recent thing in the Black Country, for some of the firms have used oil for 20 years or more. Even when coal was very cheap and when coal suitable for 1192 the purpose could be bought at 9s. a ton, manufacturers for certain purposes were using heavy oils. If this tax is to be imposed, I have not the slightest hesitation in saying, from the facts already in my possession and the interviews I have had with employers and workmen, that the only result will be that thousands of men will suffer still more in a part of the country which has been hit very hard indeed with unemployment. The export trade is the life-blood of the nut and bolt industry. They have had considerable difficulties in the last few years, and particularly in the last two years, in meeting foreign competition. They have had oil fuel plants for many years, and it will be impossible for them to change over, and this large burden will be the last straw upon the camel's back.
The plea of the hon. Lady the Member for Cannock that we should all go back to coal is impossible so far as the Black County industries are concerned. We use steel and iron in our manufactures, and if our works are closed down, as many of them will be as the result of this tax, then the coal used in the production of the steel and iron which we use as raw materials in the Black Country will be no longer required. It has to be remembered, further, that many departments in those works use a considerable quantity of coal in addition to the oil used in other departments. If those works have to be closed down, that portion of the coal trade will "go west," and the position of the Cannock Chase miner, instead of being made better, will be made considerably worse. It would be a thousand pities if we put one section of the community against another section of the community. I believe there is room for both coal and oil, and I see no reason why modern developments cannot benefit our great coalfields as well as other industries.
Another Black Country trade which is of considerable importance is the glass trade. I would point out to the Chancellor of the Exchequer, although I daresay it is within his knowledge, that for many years the glass trade suffered very severe foreign competition, especially in the cheaper kinds of glass. Bohemian glass and other foreign glass nearly monopolised the British market in the cheaper lines of glass. Of recent years our glass manufacturers have paid attention to the cheaper lines of glass. They 1193 have brought their works Up to date, they have introduced fuel oil, and the result has been that, in the main, they have captured that cheap glass market which for many years was outside their orbit altogether. If the Chancellor insists upon this tax he will simply play into the hands of their foreign competitors, and more and more of our people will be unemployed. If this tax is insisted upon, and our manufacturers are to keep their markets, that can only be done at the expense of the workpeople employed today.
The one result which I am positive will follow any attempt on the part of our manufacturers to hold their own as well as they possibly can will be that they will reluctantly—and I admit it will be reluctantly—have to go to their workpeople and say to them: "We have had this tax of £10s. 5d. a ton put on our fuel oil, and we shall have to cut wages. We do not want to do it, but if we cannot cut wages to meet this tax we shall have to close altogether." The position of the Black Country workman to-day is bad enough in all conscience. I hear hon. Members talking from time to time about the distressed areas, about bad wages and the rest of it. In the constituency which I represent and in the adjoining constituencies wages are at a terribly low level. When one thinks of a man coming home after working six shifts with about 36s. or 38s. a week, and of young men of 21 to 22 years of age bringing home only somewhere about 15s. after a full week's work, one can realise what the poverty is in the Black Country. The unemployment figure is 33 to 40 per cent. in many of the areas. This tax, which touches nearly every kind of manufacture in the Black Country, will be a terrible burden indeed. I believe the last thing the Chancellor wants is to throw more people out of employment. I do not believe he wants to degrade the already low conditions of the workers.
Another point is that in recent years new factories have been erected, with up-to-date plant, in an effort to meet competition, to create new industries and to find employment. The effect of this tax will be absolutely crushing upon them. Thousands and thousands of pounds have been expended in putting up these new factories with plant based, in the main, 1194 on oil fuel. Surely the Chancellor of the Exchequer cannot have any intention of making those people bankrupt. If he does what he gains on the swings he will lose on the roundabouts. He cannot get any Income Tax out of bankrupts. I would not argue in this way if I thought for a moment that the introduction of fuel oil would mean the ruin of the coal industry. I am positive that sooner or later the coal industry will hold its own, and will reap the reward of the research work which is being carried on, but it is quite obvious that to put an unreasonable tax upon fuel oil is no remedy for the state of affairs in the coal industry. I add my plea to the others which have been advanced that some further consideration should be given to this matter.
§ 8.44 p.m.
§ Mr. CLARRY
I wish to support the Chancellor of the Exchequer in the imposition of this tax. I regard it as a belated tax; if it had been put on some years ago we should not have had the troubles with which we are confronted to-day. I Sincerely hope that he will not succumb to the pressure which is being put upon him, because I feel sure that the bulk of that pressure is due to a misapprehension and a misunderstanding of the situation. From many aspects the new proposal is ideal. There is a moderate measure of protection, the new tax has a moderate revenue-producing basis and a buy-British basis; we can go a stage further and say that it has a burn-British basis. In the few moments which I intend to occupy I shall deal with this question from the national point of view. A large number of speakers have made reference to the gas industry, and have asked a number of questions which I feel that I may be able to answer. One of the questions suggested that, the gas industry being a very large consumer of gas oil, gas would therefore be dearer. I would like to put this case. Oil is only used for enriching purposes; the bulk of the raw material used in gas production is 18,000,000 tons of coal, so that this extra penny is spread over a very wide area. A very small fraction of it passes into the cost of a thousand cubic feet of gas, The industry anticipates—we may assume that it knows its own business best— that the penny duty on oil will be the 1195 turning point for it to obtain an increase of business for British fuel.
I can sustain that point by reading a letter. Letters have been read by most hon. Members, but mostly against the duty. This is a letter from the engineer and general manager of a local authority in Lancashire in regard to the gas department of that local authority, by no means the largest undertaking in the county. This is what he says, in reply to specific questions that were put to him.I enclose herewith a statement showing:1. The new business it is considered to be possible of attaining during the next 12 months as a result of the imposition of the Fuel Oil Duty is, approximately, 82,000,000 cubic feet per annum.2. Conversions from oil to gas, which are at present in negotiation, and which it is probable will now be carried out earlier than was proposed, totalling 58,000,000 cubic feet per annum.3. Business definitely retained where consumers had been persuaded to reconsider the introduction of oil in place of gas, amounting to 10,000,000 cubic feet.That may appear to be a comparatively small amount to some hon. Members, but it is the cumulative effect throughout the country which has to be considered, and which actually means a considerable total. In that local area it may only mean 90,000,000 cubic feet per annum, but on the basis of 60 tons of coal per million cubic feet, multiplied by a large number of other gas undertakings throughout the country, the amount will be very substantial. The industry does not think that gas will increase in price, but that it is possible that it may even be reduced in price. It takes the long view, thinking and believing that this is an opportunity for British fuel to get in where it can. The penny duty will be a turning point in that business.
I want to deal purely with the national point of view. I regret to have to say that the country has not been well served by the coal industry. That industry has not made, the best of itself. There has been a large amount of internal strife during the last 25 years by strikes, and the industry has been the subject of much legislation. Their attention has been diverted interNaily, rather than towards endeavouring to meet the situation from a national point of view. Until 1196 quite recently, there was no provision to give consumers adequate service, and no attempt was made to prove the efficiency of the fuel, or to approve of it. Certainly there was no national salesman for coal. This has obviously had the effect of allowing consumers to continue obsolete furnaces and equipment and wasteful consumption, to their extreme dissatisfaction. In cases which have come to my knowledge, processes have been in use for over 40 years, in their present state. I am glad to say that that is not the situation to-day. It is very materially altered, and the technique of coal consumption has vastly improved. Everything is being done, I am given to understand, to efface that rather bad past. What a happy hunting-ground for the oil industry, to step right into cases of that description, and especially to sell oil at dumped prices. The price is very low to-day. A few years ago it was even higher than it will be when the penny duty is put on. What safeguard is there that, at any moment, the oil kings may not decree that next day one penny or two pence may go on? There 1s no redress whatever.
§ Mr. MARTIN
May I ask the hon. Member, in all fairness, why have those cases not also been a happy hunting-ground for the coal industry, if it can offer the advantage of cheaper fuel? The coal industry should have been able to get in as well as oil.
§ Mr. CLARRY
The hon. Member will be interested to know that the coal industry is getting in, to a very material extent. Coal has displaced oil in a large number of cases. Price is a factor which comes in, but that has already been dealt with by a large number of speakers, so I will not stress it. There are hardships, as there are bound to be, in a matter like this. I do not think that we need stress them. When the consumers to whom I have referred turned over to oil, they did so more or less at their own risk, by taking what they considered was a cheaper fuel. At any moment the price might have been put up by the importers of oil. Last Autumn, petrol was put up three pence per gallon by the oil importing companies. From a certain date, 48 hours in advance, the price was to be three pence per gallon more. There was no outcry. There was nothing to be said about it, because there it was. No 1197 Members of Parliament were worried by letters and representations, and no Government was to be kicked as being the worst Government in the world -driving everybody to bankruptcy. The increase was just accepted. That was the position that we were driven into in this country. I am convInced that, if consumers of fuel will take the trouble to inquire, they can find adequate British fuel to replace oil. Among the British fuel resources, we have coal, graded or pulverised; coke, smokeless and with a higher content calorific value than oil, and gas, of which we have heard a great deal to-day, not only town gas but gas of every variety—I do not refer to the gas in this House. Gas offers all the advantages of oil to the consumer, with the additional advantage that it requires no storage. I say definitely that there is no process for which oil is used as a fuel which cannot be met conveniently and effectively by British gas. We have heard that electricity is on the switch. I do not wish to deal with that point.
I would like to say something about oil from British coal. Hydrogenation is Hot a new invention. It was first thought of in 1912, but latterly it has been developed very much, and it is one of the epoch-making processes of our time. We are only in the infancy of hydrogenation. As hon. Members know, it has the effect of putting hydrogen into material. Nature would take, perhaps, 1,000,000 years to do it, but hydrogenation does it in the flash of a second. The penny duty will help hydrogenation of tar oil, which is a product of coal. It will help also in dealing with coal in its ordinary state. The present tendency is to deal with tar oil—the liquid side of it. I can quite understand that there would be an outcry among hon. Members, and in the country, if an eight penny tax were put upon a three penny raw material such as is the case to-day with petrol, of which there is only a small production in this country as a British commodity, namely benzol, which is making great strides, owing to the Protection. Here we have a penny suggested on a three penny fuel of which we have ample British resources available. I Sincerely hope that the Chancellor of the Exchequer will not succumb to pressure. In conclusion, I venture to forecast that, if it were possible to put on 1d. this year, another 1198 1d. next year, and still another 1d. in the following year, the Chancellor of the Exchequer would not get any more revenue when the 2d. or 3d. was on, because British consumers of fuel would be able to find a British resource for their purpose. I hope, therefore, that my right hon. Friend will be firm in the matter.
§ 8.56 p.m.
We have been discussing this group of Amendments for several hours, and, although I know that there are still some hon. Members who have not had an opportunity of making the observations that they had in mind, I cannot help thinking that the discussion has ranged over a sufficiently wide field to enable the Committee now to come to a decision. It is obvious that on this question, which does not follow the ordinary party lines in the House, opinion may be very widely and deeply divided, and there are probably some hon. Members, who take extremely strong views on either side of the question, who will not, I fancy be converted by any arguments that may be addressed to them by others. The right hon. and gallant Member for Newcastle - under - Lyme (Colonel Wedgwood) who claims to be omniscient, as he is also able to claim for himself a purity of motive which he cannot ascribe to other Members, prophesied that all we should have would be the repetition over and over again of the same arguments, and that, at the end of the discussion, I should only propose to refer the matter to the Import Duties Advisory Committee. He is wrong in both respects. There has been, I should say, practically no repetition during the afternoon; every hon. Member who has spoken has put before the Committee something different from the views that have been put forward by other speakers; and I have no intention of asking the Committee to agree to this matter being referred to the Import Duties Advisory Committee.
It is true that the discussion has ranged very largely round the question of Protection, but, nevertheless, I would remind the Committee that this duty is essentially a revenue duty in the first instance, and any suggestion for reducing or abolishing it must take into account the fact that I should thereby lose an amount of revenue which, although, of course, it does not compare 1199 with the revenue to be derived from the source which we were discussing at an earlier stage, nevertheless, in these hard times, is not one with which I can afford to dispense. I would also mention a further point, because I am not sure that hon. Members have had it sufficiently in mind. Not only have I to consider a new source of revenue, but I must also consider the security of an existing source of revenue, and, in the present instance, the revenue from the petrol tax is certainly threatened, I will not say to any very serious extent at present, but it is threatened, by the competition of motors using other kinds of oil which hitherto have entirely escaped from any duty. One sees, from a discussion of this kind, how interests grow up around articles and commodities which are left out of a scheme of taxation which covers the greater part of our imports, and, in the interest of the future revenue from the petrol tax, I certainly could not agree to continue the exemption from any impost of a serious competitor of that fuel.
It has been suggested that this tax was a tax upon progress, but I think that that argument was really disposed of by my right hon. Friend the Member for Hill head (Sir R. Horne), who speaks with considerable knowledge. I said a little while ago that there might be hon. Members who would not be convInced by arguments from the other side, but I think that a number of hon. Members must have felt that my right hon. Friend, speaking with general knowledge of the situation, pretty well disposed of the argument that progress lay solely in the adoption of oil fuel. Progress may lie in various directions. It may be in the direction of oil fuel to-day, it may be in the direction of gas to-morrow, it may be in a third direction in a year or two's time. I do not think, therefore, that that is really the ground on which we have to examine this tax.
What, then, is the purpose of the tax? I have already said that its primary purpose is to provide me with an additional source of revenue, and to safeguard that revenue which I already enjoy; but I do not deny for a moment—indeed, I have stated on previous occasions—that we have in mind, in proposing this tax, definitely the protection of a British resource, 1200 the greatest natural resource that we have in this country the question, therefore, which I think the Committee have to consider is this: If the imposition of this tax does definitely assist the great British industry of coal and those industries which are associated with derivatives* of coal, we have to weigh up on the one hand the benefit that is conferred upon these important staple industries, and, on the other hand, the injury that may be done to other industries. I admit frankly that there is a great deal to be said on both sides; indeed, it cannot be otherwise. In particular, one can well understand why an industry which has recently been induced to instal oil-burning apparatus, in lieu of some other form of fuel which it has used in the past, in the hope of obtaining thereby either a saving of money or greater convenience or cleanliness, will naturally regard with considerable concern the imposition upon it of a burden which it had not contemplated at the time. But, unless one is prepared to weigh the pros and cons in a general way, that sort of consideration would prevent the putting of a tax on anything at all. Really it is impossible to put on a new tax anywhere without treading on somebody's corns; it must hurt some people. At the same time, I hope I may say, without offence to those who have been putting the case for particular industries, that it is natural that, when a new tax is first imposed, those industries which are affected injuriously by it should put the worst case they can. They take the maximum amount of injury that could be done and they are apt to assume that that, in fact, is the injury that they are going to suffer. They assume that the whole of the tax is going to be passed on to them and that they cannot alter to any other form of equipment which would enable them to avoid it or, if they have to do it, that, at any rate, it will cost them a very serious sum of money.
Let us look at one or two considerations on the other side. First of all, I take the case of industries which are using oil. I am not dealing for the moment with hotels or offices. I am thinking of industries. Sometimes we are told that it is going to cripple them in their competition with the foreigner. Sometimes we are told that it is simply going to cripple them, because they will have to contribute to the Exchequer an amount of money which they cannot possibly 1201 afford. Suppose their competition is competition with the foreigner, we must not leave out of account that we have changed our fiscal system and that we have given to the great bulk of our industries an amount of protection which they have not had before and which may be set against this difficulty which they say they will now have to encounter because of the increased tax that they will have to pay on their oil. In the second place, one must remember that in the case of the principal competitors, at any rate, in some of the articles that have been mentioned to-day, in the case of Germany, the tax upon oil is 10 times as heavy as anything that we are proposing, here and that, even supposing the whole of the tax is added to the cost of the fuel, the fuel will be cheaper than it is to-day in Germany.
So much for foreign competition. Then, as regards home competition, we are told that it is very difficult to pass this on to the consumer. Maybe it is. There has to be a certain amount of readjustment. I grant that, and it may be that some firms will find considerable difficulty, in the first instance, in making those readjustments. But do not let us forget that, in the first place, the difficulties that have been suggested are based on the assumption that the whole of the cost is going to be added to the present cost of fuel. The price of coal has remained comparatively steady for a number of years. The price of oil has fallen by 15s. a ton in the last five years. This is only 20s. a ton, so that there is at least a margin which may, perhaps, prove to be a source of some mitigation of the difficulties that have been anticipated. But, if the worst comes to the worst, supposing it were true that the additional burden upon an individual firm or industry were sufficiently great, I will not say to cripple it, because I cannot conceive that it can cripple an industry-—that is going too far—but to diminish its opportunities of expansion and possibly even, we will say, to contract its activities, even then I say you must remember that you have to set against that the increased employment which you expect to create in the industries of coal, gas and electricity and on the railway systems of the country by the imposition of the tax.
One suggestion that has been made is that we should differentiate between the different kinds of oil, and that is the pur- 1202 pose of the Amendment that my hon. Friend moved. I do not think that, at any rate on this occasion, it is worth while to examine the particular principle which he suggested as a basis of distinction. I take the general suggestion that we should make a difference between the heavier and the lighter oils and that we should exempt the heavier oils from the operation of the duty. Someone else might possibly suggest that, if you did not exempt the heavy oils, at any rate you might give them a rather lower level of duty than the others. But that is going to leave some of the Diesel oil outside the full duty. That is going to some extent to leave the competitor of petrol outside of the duty. It will relieve the wrong kind of oil from my point of view; it will leave gas oil still bEarlng a penny, and it will still further increase the difficulties of the gas industry, while it will exempt the oils which are the principal competitors of the coal trade. The result of that would be that, while I should not conciliate all those who are now attacking the duty, I should find that I had destroyed the very benefit which is one of the principal reasons for imposing it. I have gone into this question of differentiation with some care to see whether that was an advisable and desirable method of varying the tax as I had origiNaily proposed it; but the conclusion that I have come to after looking into the thing all round is that I have been unable to see any way of differentiation and of having different levels of taxation which would really meet the views of those who object to the tax and would not at the same time destroy the benefits that I hope to obtain from it.
This is a question of great importance in considering employment. The consumption of these fuel oils is about 2,000,000 tons a year. No one, of course, suggests that we can expect that the whole of that consumption of oil is going to be replaced by a corresponding consumption of coal, but, in order to show the order of the competition which coal is meeting from oil, I would call attention to the fact that the equivalent in coal is 3,000,000 tons, and I am informed that that would mean the employment of 12,000 miners. I am not suggesting that, if we put this tax on, we are going to get another 12,000 miners employed. I recognise that in many cases there will not be a shift-over from the present 1203 practice to coal. But we have not only to consider the situation as it is to-day. It is not a static situation. It is a situation in which there have been constant encroachments on the use of coal, and the coal people are finding that, year by year, there are more and more institutions, firms and bodies using oil in preference to coal which very likely, if they had just had to sit down and think what it would mean in taxation, would have gone more carefully into the difference between the two and, indeed, very likely have decided to put in some form of coal-using, coke-using or gas-using apparatus instead of the oil. My information is that, even Since the imposition of the tax, experience has shown that in quite a large number of cases where the installation of oil had been contemplated there has been a change-over and the person who was going to put in the oil has decided after all to adopt a system which would employ coke or gas. It is true that in some cases they are waiting to see what happens to the tax before they fiNaily make up their minds, but the evidence which has come to me has shown me that there is a good deal more likelihood, not only of persons choosing to take the coal-using apparatus instead of the oil-using apparatus in the future, but of actual conversion from using oil to-day to the other system than I had supposed possible.
It appears that the conversion from the one system to the other is, in many cases, not a very costly affair. Instances have been given to me where that conversion has been effected. My right hon. Friend quoted a case, but there are other cases of which I have heard where the conversion has actually been paid for in the course of a very short time by the cheaper form of fuel. As I have said before, this is a big thing to this country. The consumption of coal in this country is something like 160,000,000 tons a year. A very large number of people earn their livelihood either by getting coal or by one of the trades which are directly dependent upon coal. As has been pointed out to us to-day by some of those objecting to this tax, the industries which are using oil to-day are using a great deal more coal, in one way or another, than they are using oil. Therefore, it is really in their interests that the coal industry should not be 1204 allowed to drift further and further into the background, which means, of course, that as it does so its costs continue to go up.
It is my belief, after having heard what has been said this afternoon, that the case for the tax is a good one, that it is calculated, taking the broad national view, to help British industry, and that we have to take care to see that our British resources are not dissipated by the competition of foreign supplies, and the Committee would do well to accept the tax as I origiNaily proposed it. I hope that the Committee will now be prepared to come to a decision.
§ 9.18 p.m.
§ Mr. DINGLE FOOT
I want to put a question to the right hon. Gentleman upon a point which was raised by an hon. Friend behind me and with which he has not dealt. It is the question of oil used in the jute industry for batching. None of the arguments which the right hon. Gentleman advanced, either on the last occasion on which the tax was debated or on this occasion, applied to this particular section of the tax. He says that these oils were only left out of the general system of duties by accident, that they are calculated to produce an appreciable amount of revenue, and that he has had strong representations from other industries, such as coal and gas, and that he has to hold the scales even between the two sides. I think that I am right in saying that none of those arguments apply to that part of the tax which will fall upon oil used in batching. Surely it is not the policy of the right hon. Gentleman to impose a tax upon the necessities of industry when those necessities cannot be obtained from any home source. The amount of revenue, some £8,000 or so, which will be obtained from those particular sources is negligible to the Exchequer, though it is very far from negligible to the industry concerned, and in this case, at any rate, there can be no question of competition with any British industry.
On the last occasion when the matter was debated the right hon. Gentleman said that it was inaccurate to describe these oils as raw material. In this particular instance there can be no question that they are a raw material. I ask the right hon. Gentleman, as he did not deal with those oils in his speech, 1205 whether he cannot see his way, even if he has to proceed with this tax, to give some form of exemption or rebate in order to help an industry which has been suffering very much from the depression.
§ The DEPUTY-CHAIRMAN
I do not think the hon. and learned Member for Argyllshire (Mr. Macquisten) was here earlier in the evening when the Chairman ruled that the question of shipping would arise at a later stage. I think the Committee is ready to come to a decision.
I deliberately did not address myself to the individual cases which have been put up because I thought the Committee would really see that the general arguments which I used really applied to all the individual cases. We shall have a further opportunity of discussing those matters on the Report stage, more particularly the specific cases, such as the case put by the hon. Member for Dundee (Mr. Dingle Foot), and I hope that the Committee will now accept the general statement.
§ Mr. MALLALIEU
I should not have risen at this stage of the Debate, after the Chancellor of the Exchequer has patiently sat through so many diverse speeches, listening many hours, had it not been for the inference which is to be drawn from the speech he has just made, that, whereas supporters of the tax are supporting it upon national grounds, all those who have ventured to object to it are doing so on particular grounds. I submit to the Committee that exactly the opposite is the case. Every single argument, except that which I can only describe, with great respect to the Chancellor of the Exchequer, as the paltry argument of the loss of petrol revenue, which he has not even substantiated, put forward by the Chancellor of the Exchequer and by hon. Members who have spoken in support of the tax to-day has been, in one form or another, for the support of a particular industry, namely, the coal industry or its derivatives. This tax is but one aspect of the Government's 1206 policy in support of coal. The coal industry is of considerable importance, but I want to ask the Chancellor of the Exchequer and those hon. Members who are supporting the tax, whether fuel is to be the servant of industry, or is industry to be the servant of fuel, and of a particular kind of fuel? Members in all parts of the House to-day have brought forward instances, and the accumulation of those instances should be sufficient to convInce the Chancellor of the Exchequer, were he not quite blind, in his proposal, to national considerations as distinct from coal considerations, that upon national grounds the tax is unsupportable, owing to the unemployment which it will cause being nothing like offset by the very small and doubtful increase in employment which may come to the coal industry and its derivative industries.
The right hon. Member for Hillhead (Sir E. Horne) and the Chancellor of the Exchequer have both referred to Germany having an- exceedingly heavy tax upon oil now and not having had it previously. May I put this one point to the Chancellor of the Exchequer? Just after the War there was no tax in Germany upon the crude oil which the Chancellor of the Exchequer is now proposing to tax. At that time Germany held sway all over the world for the manufacture of crude oil engines. There were the Junker and Benz engines, and the M.A.N. engine developed for submarines during the War. Those engines were sent all over the world, and it was a tremendous industry for Germany. Germany put a heavy tax upon crude oil and made it almost prohibitive. To-day this country, which has had no tax up to now upon crude oil, leads the world in the manufacture of these engines. Is it nothing to the Chancellor of the Exchequer that, in these hard times, we in this country should have obtained the largest export trade, in the manufacture of these engines, very largely because there was freedom from tax for this oil in this country, with a consequent development of this industry here?My submission to the Committee is that no respectable argument has been put forward except arguments which are only valid with regard to coal. On national grounds, the Committee should refuse to tax this raw material of industry.
§ Question put, "That those words be there inserted."1208
§ The Committee divided: Ayes, 57; Noes, 239.1209
|Division No. 192.]||AYES.||[9.37 p.m.|
|Acland, Rt. Hon. sir Francis Dyke||Holdsworth, Herbert||Owen, Major Goronwy|
|Agnew, Lieut.-Com. P. G.||Horobin, Ian M.||Parkinson, John Alien|
|Attlee, Clement Richard||Hutchison, W. D. (Essex, Romford)||Perkins, Walter R. D.|
|Banfield, John William||Jones, Henry Haydn (Merioneth)||Rea, Walter Russell|
|Bernays, Robert||Jones, Morgan (Caerphilly)||Salt, Edward W.|
|Bevan, Aneurin (Ebbw Vale)||Kirkwood, David||Salter, Dr. Alfred|
|Bower, Lieut.-Com. Robert Tatton||Knox, Sir Alfred||Sinclair. Maj. Rt. Hn. Sir A.(C'thness)|
|Briant, Frank||Lansbury, Rt. Hon. George||Smith, Sir Jonah W. (Barrow-in-F.)|
|Cripps, Sir Stafford||Leckie, J. A.||Smith, Louis W. (Sheffield, Hallam)|
|Dobbie, William||Leonard, William||Strickland, Captain W. F.|
|Edwards, Charles||Lewis, Oswald||Thorne, William James|
|Evans, David Owen (Cardigan)||Liddall, Walter s.||Tinker, John Joseph|
|Evans, Capt. Arthur (Cardiff, S.)||Macdonald, Gordon (Ince)||Wedgwood, Rt. Hon. Josiah|
|Foot, Dingle (Dundee)||McEntee, Valentine L.||Williams, David (Swansea, East)|
|George, Major G. Lloyd (Pembroke)||McGovern, John||Williams, Dr. John H (Llanelly)|
|Griffith, F. Kingsley (Middlesbro', W.)||Maclean, Nell (Glasgow, Govan)||Wise, Alfred R.|
|Groves, Thomas E.||Mallalieu, Edward Lancelot|
|Hamilton, Sir R. W.(Orkney & Zetl'nd)||Mander, Geoffrey la M.||TELLERS FOR THE AYES.—|
|Harris, Sir Percy||Mason, David M. (Edinburgh, E.)||Mr. Alexander Ramsay and Mr.|
|Hicks, Ernest George||Maxton, James||Alan Todd.|
|Acland-Troyte, Lieut.-Colonel||Cowan, D. M.||Howitt, Dr. Alfred B.|
|Ainsworth, Lieut.-Colonel Charles||Craven-Ellis, William||Hudson, Capt. A. U. M. (Hackney,N.)|
|Allen, Sir J. Sandeman (Liverp't, W.)||Crooke, J. Smedley||Hume, Sir George Hopwood|
|Allen, William (Stoke-on-Trent)||Crookshank, Col. C. de Windt (Bootle)||Hunter, Capt. M. J. (Brigg)|
|Anstruther-Gray, W. J.||Culverwell, Cyril Tom||Hurd, Sir Percy|
|Apsley, Lord||Davies, Edward C. (Montgomery)||Hurst, Sir Gerald B.|
|Aske, Sir Robert William||Denman, Hon. R. D,||Jackson, J. C. (Heywood & Radcliffe)|
|Astbury, Lieut.-Com. Frederick Wolfe||Denville, Alfred||Jennings, Roland|
|Atholl, Duchess of||Dickie, John P.||Jesson, Major Thomas E.|
|Baldwin, Rt. Hon. Stanley||Drewe, Cedric||Joel, Dudley J. Barnato|
|Balnial, Lord||Duckworth, George A. V.||Jones, Sir G. W. H. (Stoke New'gton)|
|Banks, Sir Reginald Mitchell||Dugdale, Captain Thomas Lionel||Jones, Lewis (Swansea, West)|
|Barclay-Harvey, C. M.||Duncan, James A. L. (Kensington, N.)||Ker, J. Campbell|
|Barton, Capt. Basil Kelsay||Edmondson, Major A. J.||Kimball, Lawrence|
|Batey, Joseph||Ellis, Sir R. Geoffrey||Lamb, Sir Joseph Quinton|
|Beauchamp, Sir Brograve Campbell||Elliston, Captain George Sampson||Lambert, Rt. Hon. George|
|Beaumont, Hon. R.E.B. (Portsm'th.C.)||Elmley, Viscount||Law, Sir Alfred '|
|Benn, Sir Arthur Shirley||Emrys-Evans, P. V.||Leighton, Major B. E. P.|
|Bennett, Capt. Sir Ernest Nathaniel||Entwistle, Cyril Fullard||Levy, Thomas|
|Bird, Sir Robert B.(Wolverh'pton W.)||Erskine-Boist, Capt. C. C. (Blackpool)||Lindsay, Noel Ker|
|Blaker, Sir Reginald||Essenhigh, Reginald Clare||Locker-Lampson, Rt. Hn. G.(Wd.Gr'n)|
|Blindell, James||Evans, Capt. Arthur (Cardiff, S.)||Lovat-Fraser, James Alexander|
|Bossom, A. C.||Falls, Sir Bertram G.||Mabane, William|
|Boulton, W. W.||Fielden, Edward Brockiehurst||MacAndrew. Lt.-Col. C. G. (Partick)|
|Bowyer, Capt. Sir George E. W.||Fraser, Captain Ian||MacAndrew, Capt. J. O. (Ayr)|
|Bracken, Brendan||Fremantie, Sir Francis||McCorquodale, M. S.|
|Braithwaite, J. G. (Hillsborough)||Galbraith, James Francis Wallace||Macdonald, Sir Murdoch (Inverness)|
|Briscoe, Capt. Richard George||Gauit, Lieut.-Col. A. Hamilton||McKie, John Hamilton|
|Broadbent, Colonel John||Gibson, Charles Granville||McLean, Major Sir Alan|
|Brockiebank, C. E. R.||Gillett, Sir George Masterman||McLean, Dr. W. H. (Tradestonl|
|Brown, Col. D. C. (N'th'l'd., Hexham)||Glossop, C. W. H.||Maitland, Adam|
|Brown, Ernest (Leith)||Gluckstein, Louis Halle||Makins. Brigadier-General Ernest|
|Brown, Brig.-Gen. H.c.(Berks.,Newb'y)||Goodman, Colonel Albert W.||Manningham-Buller, Lt.-Col. Sir M.|
|Browne, Captain A. C.||Grattan-Doyle, Sir Nicholas||Margesson, Capt. Rt. Hon. H. D. R.|
|Buchan-Hepburn, P. G. T.||Grenfell, E. C. (City of London)||Meller, Richard James|
|Butt. Sir Alfred||Grimston, R. V.||Mills, Sir Frederick (Leyton, E.)|
|Cadogan, Hon. Edward||Guest, Capt. Rt. Hon. F. E.||Mills, Major J. D. (New Forest)|
|Campbell, Edward Taswell (Bromley)||Guinness, Thomas L. E. B.||Milne, Charles|
|Campbell, Vice-Admiral G. (Burnley)||Gunston, Captain D. W,||Molson, A. Hugh Elsdale|
|Caporn, Arthur Cecil||Hacking, Rt. Hon. Douglas H.||Moore-Brabazon, Lieut.-Col. J. T. C.|
|Carver, Major William H.||Hales, Harold K.||Morris, John Patrick (Salford, N.)|
|Cautley, Sir Henry S.||Hall, Capt. W. D'Arcy (Brecon)||Morris-Jones, Dr. J. H. (Denbigh)|
|Cayzer, Maj. Sir H. R. (Prtsmth., S.)||Hammersley, Samuel S.||Morrison, William Shepherd|
|Cazalet, Thelma (Islington, E.)||Hartland, George A.||Moss, Captain H. J.|
|Chamberlain, Rt. Hon. N. (Edgbaston)||Haslam, Henry (Horncastie)||Muirhead, Major A. J.|
|Chapman. Col. R.(Houghton-le-Spring)||Haslam, Sir John (Bolton)||Munro, Patrick|
|Clarry, Reginald Georgs||Heilgers, Captain F. F. A.||Nation, Brigadier-General J. J. H.|
|Clayton Dr. George C.||Heneage, Lieut.-Colonel Arthur P.||Nicholson, Godfrey (Morpeth)|
|Cochrane, Commander Hon. A. D.||Hepworth, Joseph||North, Edward T.|
|Colfox, Major William Philip||Herbert, Capt. S. (Abbey Division)||Nunn, William|
|Conant, R. J. E.||Hope, Sydney (Chester, Stalybridge)||O'Donovan, Dr. William James|
|Cook, Thomas A.||Hore-Belisha, Leslie||O'Neill, Rt. Hon. Sir Hugh|
|Cooke, Douglas||Hornby, Frank||Palmer, Francis Noel|
|Copeland, Ida||Horne, Rt. Hon. Sir Robert S.||Patrick, Colin M.|
|Courtauid, Major John Sewell||Horsbrugh, Florence||Peake, Captain Osbert|
|Pearson, William G.||Sassoon, Rt. Hon. Sir Philip A. G. O.||Summersby, Charles H.|
|Peto, Geoffrey K. (W'verh'pt'n, Blist'n)||Savery, Samuel Servington||Sutcliffe, Harold|
|Pickford, Hon. Mary Ada||Scone, Lord||Tate, Mavis Constance|
|Pike, Cecil F.||Shakespeare, Geoffrey H.||Thomson, Sir Frederick Charles|
|PowNail, Sir Assheton||Shaw, Helen B. (Lanark, Bothwell)||Thorp, Linton Theodore|
|Ramsay, Capt. A. H. M. (Midlothian)||Shaw, Captain William T. (Forfar)||Todd, Capt. A. J, K. (B'wick-on-T.)|
|Ramsbotham, Herwaid||Shepperson, Sir Ernest W.||Turton, Robert Hugh|
|Ramsden, Sir Eugene||Shute, Colonel J. J.||Ward, Lt.-Col. Sir A. L. (Hull)|
|Ray, Sir William||Slater, John||Ward, Irene Mary Bewick (Wallsend)|
|Reid, William Allan (Derby)||Smiles, Lieut.-Col. Sir Walter O.||Ward, Sarah Adelaide (Cannock)|
|Remer, John R.||Smith, R. W.(Ab'rd'n & Kinc'dine, C.)||Warrender, Sir Victor A. G.|
|Rentoul, Sir Gervals S.||Smith-Carington, Neville W.||Waterhouse, Captain Charles|
|Renwick, Major Gustav A.||Soper, Richard||Wells, Sydney Richard|
|Rhys, Hon. Charles Arthur U.||Sotheron-Estcourt, Captain T. E.||Whiteside, Borras Noel H.|
|Roberts, Sir Samuel (Ecclesall)||Southby, Commander Archibald R. J.||Whyte, Jardine Bell|
|Rosbotham, Sir Samuel||Spender-Clay, Rt. Hon. Herbert H.||Williams, Herbert G. (Croydon, S.)|
|Ross Taylor, Walter (Woodbridge)||Spens, William Patrick||Windsor-Clive, Lieut.-Colonel Georss|
|Runciman, Rt. Hon. Walter||Stanley, Lord (Lancaster, Fylde)||Winterton, Rt. Hon. Earl|
|Runge, Norah Cecil||Stanley, Hon. O. F. C. (Westmorland)||Womersley, Walter James|
|Russell, Albert (Kirkcaldy)||Stevenson, James||Wood, Rt. Hon. Sir H. Kingsley|
|Russell, Alexander West (Tynemouth)||Stewart, J. H. (Fife, E.)||Worthington, Dr. John V.|
|Russell, R. J. (Eddisbury)||Stones, James||Wragg, Herbert|
|Rutherford, John (Edmonton)||Strauss, Edward A.|
|Rutherford, Sir John Hugo (Liverp'l)||Stuart, Lord C. Crichton-||TELLERS FOR THE NOES.—|
|Samuel, Sir Arthur Michael (F'nham)||Sueter, Rear-Admiral Murray F.||Lord Erskine and Major George|
|Sandeman, Sir A. N. Stewart||Sugden, Sir Wilfrid Hart||Davies.|
Question put, and agreed to.
§ Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again, "put, and agreed to. —[Captain Margesson.]
§ Committee report Progress; to sit-again To-morrow.