HC Deb 12 June 1934 vol 290 cc1589-608

Sub-section (1) of Section six of the Finance Act, 1933, shall have effect as though the words "seven pence" were replaced by the words "seven pence halfpenny."—[Mr. Mallalieu.]

Brought up, and read the First time.

6.0 p.m.


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

There was originally a rebate of the whole of the tax so far as heavy hydrocarbon oils were concerned. The rebate was subsequently reduced from 8d. to 7d., leaving a tax of 1d. upon these heavy hydrocarbon oils. This proposed new Clause seeks to cut down the existing tax by ½d., leaving it at ½d. instead of 1d. The primary object of the tax has been stated by the Chancellor of the Exchequer on previous occasions to be the helping of the coal industry, and I think he said at the same time that the secondary object was a revenue object. I am going to suggest to the Committee that, even if he must still pursue the revenue object, we should look a little more closely into the aspect of the coal industry and the benefit which that industry may or may not receive from the tax.

It has been assumed rather too easily, in my opinion, that the decline in the number of men employed in the coal industry from somewhat over 1,000,000 before the War to 800,000 in November of last year has been due to the use of fuel oil. In fact, the Coal Utilisation Council said the other day, almost glibly as I think, that oil was the most serious competitor of coal and its derivatives; and, in reply to a question which I put to the Secretary for Mines on 5th June last, the hon. Gentleman stated, on the authority of the same Council, that a large number of tons of coal were taken last year, as well as the year before, entirely on account of the tax which was imposed upon fuel oil, thereby, I suppose, justifying the imposition of the tax in the interests of the coal industry. In giving the details of the estimated figure of 600,000 tons per annum furnished by the Coal Utilisation Council, the Secretary for Mines said that 316,000 tons had gone back to coal from oil, 83,000 tons had gone back to coke, and so forth. The hon. Gentleman expressed himself as unable to give details as to how these figures were arrived at, but without further information as to those details it would not be proper to continue this burden upon oil-using industries any further, whatever may be said for the revenue consideration, on which I do not propose to touch.

There is not the slightest doubt that in certain instances, the most notable being that of coal for bunkers, oil has superseded coal to a very large extent, for whereas, in 1914, 96.6 per cent. of the world's mechanically propelled ships used coal, in 1932 the percentage was barely 54.6. Of course, however, this tax does not apply to such oil, and, therefore, I do not think it can be suggested that, so far as bunkers are concerned, the tax upon oil can benefit the coal industry in the slightest degree. Estimates have been given in the House before now of the amount of coal which the industries that have thrived upon oil have caused to be used in this country. For instance, in the making of motor cars, coaches and lorries, a substantial amount of coal is needed, to say nothing of the aeroplane industry, It has been estimated by very eminent authorities that, for every ton of oil imported into this country, a demand is created for not less than a ton of coal. Therefore, to tax oil in order to increase the quantity of coal consumed is a misguided policy.

Surely, it is only desirable to increase the consumption of coal so far as the increase of consumption is economical. I do not suppose that the Chancellor of the Exchequer would discourage the spending of money upon research which had for its object the lessening of the consumption of coal so far as that consumption was uneconomic, and that, surely, has been one of the chief causes of the fall in employment in the coal industry. The utilisation of coal has become so very much more efficient—a desirable process. If we are to tax oil regardless of whether coal can be used as efficiently as oil, we are really just flying in the teeth of the very process which everyone would seek to encourage, namely, the bringing about of efficiency in the consumption of coal as much as in the consumption of any other commodity for which industry has to pay. Fuel oil and coal are primarily only of use in so far as they serve industry; and, in so far as we tax industry for the benefit of the production of these two subjects, which normally should themselves serve industry, we are doing a topsy-turvy thing. Therefore, I would ask the Chancellor of the Exchequer, if he still persists in his revenue object with this Fuel Oil Tax, at least to consider a reduction of the tax by one-half, in order that those industries which have put in the most up-to-date machinery in order to consume oil and produce their power more economically may not he unduly penalised by the tax.

6.7 p.m.


We are now familiar with the usual form of the arguments in favour of reducing the duty on hydrocarbon oils, and we realise that their supporters think that they are on the strongest ground when they pretend that these hydrocarbon oils are not really serious competitors of coal—that the advantages they have conferred upon the coal industry almost, if not more than, outweigh the work and profits of which they have undoubtedly robbed it by supplanting coal-consuming plant. This argument is by no means as near the truth in these days as it may have been some years ago. To-day I think it is no exaggeration to say, and I am sure that those who are concerned with the coal industry or represent mining interests will assert emphatically, that there is really no alliance between these two forms of fuel; they are for practical purposes in direct competition the one with the other.

I agree with the hon. Member for Colne Valley (Mr. Mallalieu) that one particular industry should not be handicapped for the benefit of another, but within the last few years inventions in connection with coal gas and the utilisation of coal have, in my humble opinion, and I can produce facts to prove it, entirely altered the situation. It used to be the case that the up-to-date man who wished to reduce his costs and put in a plant that could compete economically with anyone in Europe would put in an oil-burning plant, but now that same man, with the information that is at his disposal, will scrap his oil-burning plant and replace it by some form of gas chamber or coke oven or other coal-consuming plant. Therefore, we have the position that these two fuels are not allies, but direct competitors, with the superior qualities and superior economic forces now on the side of coal. Therefore, it was with great surprise that I observed the name of an hon. Member representing miners attached to a Clause to much the same effect as the present one.

I had placed in my hands a very short time ago two typical instances which I should like to give to the Committee, if they will bear with me for a few moments, in order to prove my assertion that, while it used to be the case that by substituting oil-burning plant an economic advantage could be gained, oil has now been superseded by coal in a great many ways, and I believe that the coal industry can claim that in practically all ways it has shown superiority. I will give two typical instances which have occurred within very recent times. One industry, which was consuming 10 tons of oil per week, replaced its oil-burning plant by a coal-consuming plant, with the result that, whereas it used to burn 10 tons of oil per week, thereafter it consumed 15 tons of coal. The quantity of fuel used was 1½ times as great, but the price of the oil was 2½ times the price of the coal, so that this particular industry saves the cost of its change of installation every 19 weeks, without reckoning the tax. The other case was roughly on the same lines. An oil-consuming plant was replaced by a coal-consuming plant, and the consumption of fuel was increased rather more than 1½ times. The prices were slightly less favourable on the contracts made, but still this industry is saving the cost of the change of installation, again without including the tax, once every 33 weeks. These are most important facts, particularly for this country.

We have all welcomed the efforts which the Government have made to assist the coal industry to hold its own, and a stage has been reached at which, thanks to inventions, the coal industry is in a position to more than hold its own; indeed, it can now improve upon oil in nearly all cases, as is borne out by the two instances which I have given. When we come to consider the case of this country under ordinary peace time conditions relying, as we do to a great extent, on the coal industry, it is high time to see to it that these facts are properly known and understood. On purely economic grounds it is worth while to do everything we can in the first place to prevent the scrapping of coal-burning plant and its replacing by oil, when it can be replaced by a more efficient coal-burning system. The Miners' Federation have grasped this fact and in view of their manifesto, I am all the more astonished to find the name of the hon. Member for Normanton (Mr. T. Smith) down to an Amendment which seeks to abolish the whole tax. May I read an extract from that manifesto which appeared in the "Times" of 23rd February? It is difficult to believe that fuel consumers in this country would continue to buy foreign oil if they were fully acquainted with up-to-date methods of burning British coal. Methods of coal burning have recently been so improved that the advantages popularly associated with oil burning no longer exists. Foreign oil is a menace to our country, sapping her economic foundations and taking away the livelihood of her people. Its total supercession by our own fuel would have no harmful reaction on trade and industry. On the contrary, by reviving the great coal industry, its suppression would revitalise the industrial life of our country. Those are strong words. I would not stress them. I would not cross one t or dot one i. I am glad the Miners' Federation have had the foresight, the knowledge and the courage to put this on paper. It is only a pity that their representatives in the House have been registering adverse votes on the subject so consistently, and I hope in the future we shall find them going with us into the Lobby to support the Chancellor of the Exchequer in any measures that he may take for sustaining the duties on hydrocarbon oils at their present level or, if necessary, adding to them. I ask the right hon. Gentleman to reject the Clause.


If, as the hon. and gallant Gentleman suggests, coal can be used as efficiently as oil in most industries, why is it necessary to have the tax at all to protect the coal?

Captain RAMSAY

That is a question for the Chancellor to answer.

6.18 p.m.


I hope that the Chancellor will answer the question. When this tax was first introduced 12 months ago, it evoked a great deal of opposition from all quarters of the House and all parts of the country, because of its unexpected nature and the very serious burden that it was obviously going to impose on some of the most progressive manufacturers in the country who had adopted the use of fuel oil for manufacturing purposes. From no part of the country were those protests more vocal than from the Black Country. On one or two occasions I, with others, voiced those opinions in the interests of many of those trades which have had to accommodate themselves, whether they liked it or not, to changed conditions and to bear this burden. Twelve months have gone by, and I hope the Chancellor will be able to tell us something of the experience of that time and whether he does not feel that, in view of what has happened, he is able now to reduce the tax somewhat and to hold out the hope of taking it away altogether. We have had it clearly demonstrated that it is no longer necessary for the protection of coal. The protests in many parts of the country, the Black Country in particular, are still strong, and the manufacturers feel very dissatisfied, as they did a year ago, at being asked to bear this burden, which has fallen so severely on their shoulders alone, to help the coal industry. I would ask him to review the position now and to hold out some hope, if he can, that, if not now, at any rate in the near future it may be possible to remove this heavy burden.

6.22 p.m.


The distributive trades are being forced to bear a burden because of this tax. That is especially the case with bakeries, laundries and dairies. I am informed that the present price of oil is 52s. 6d. a ton, which is about 2½d. a gallon. Last year's tax of a penny a gallon approximately adds 40 per cent. to the cost. There is one large society which now bears an additional cost of £4,000 per annum. The Wholesale Co-operative Society itself answered the call to bring in this new type of fuel. It uses 25,000 tons per annum, and has to meet an additional cost of £26,000. I trust that the Chancellor of the Exchequer will give further consideration to the points that have been put forward, and will be able to give some relief.

6.25 p.m.


I should like to associate myself with those who have urged on the Chancellor of the Exchequer the advantages of reducing this tax. The hon. and gallant Gentleman the Member for Peebles (Captain Ramsay), who is always so vigilant in the interests of the miners, said he would join with Members on this side in asking for a reduction of the tax if it could be shown that it was for the welfare of any industry. The hon. Member who spoke last has mentioned a number of industries which view the tax as a very heavy additional burden. I should like to mention another—the industry of electrical supply. Public electricity undertakings have been the pioneers in electrical supply, and they have found through long experience that the oil engine is the best type of prime mover for their purpose, and the development in many districts has been based upon the use of the oil-engine as the type of prime mover which is the best calculated to give a cheap and efficient supply of electricity.

The effect of this tax has been' to cause an increase in oil fuel costs of from 25 per cent. to 33 per cent. to these public electricity undertakings. The increase is borne by the consumers. It is a burden imposed on industry and the development of electricity, which, we all agree, is immensely in the interests of industry as a whole, and to foster which this Parliament has passed a number of Acts in recent years, is retarded. It is disheartening to those who have been for a long series of years applying their minds to the development of electricity, the reduction of costs, and scientific progress in this, that and the other direction to find their efforts offset by this arbitrary tax. The amount of revenue is very small. It would amount to about £30,000. That is a small sum to the Treasury, but it would be of immense value to these undertakings, and would enable them to cheapen and develop the supply of electricity. Fishing vessels and coasting steamers are exempt, and I suggest that public electricity undertakings are at least as important.


Has the right hon. Baronet an Amendment down to that effect?


No, I am supporting the general case for a reduction of the tax. I am going to give one other case, and I hope the Chancellor will see his way to give us the whole of the reduction for which we ask. If he would be willing to consider sympathetically and favourably an Amendment on these lines, I would either await the introduction of one by him on Report or I should be very glad to put one down, if he would prefer me to follow that course, which would deal only with the question of public electricity supply undertakings.

The other case that I was going to bring forward is that of hospitals. I know of a hospital in which the burden of the tax, based upon the average fuel costs of the last three years, would amount to £2,400, an increase of 42 per cent. Obviously the hospital is not going to face up to that. It is going to do what the Chancellor intended it to do when he introduced the tax, and change to coal. That means an expenditure of £2,000 on conversion. It means that the hospital will be forced to use a fuel less well adapted to hospital purposes than oil. Oil is far more easily handled. It is much cleaner. There is no residue to dispose of. There are no fumes to fill the corridors of the hospital. Therefore, they will be using a fuel which will give a less good service to the sick in the hospital than the oil fuel does. It will be doing this at a cost, first, of £2,500 paid in tax before and during the conversion of their plant, and, secondly, at a cost of £2,000 after the conversion of their plant. That is a cost of £4,500 diverted from the service of the sick in order to provide the hospital with a plant less suitable for the purposes of a hospital than they had before.


Can the right hon. and gallant Gentleman say what will be the difference in the annual cost of conversion from oil to coal in the case of that hospital?


I have not that particular figure, but I can give two figures which I think are more important. First of all, there is the cost which the hospital would have incurred if they had kept to the fuel which is best for the service of the hospital and of the sick. If they had kept to oil fuel it would have cost £2,400 a year. They have been compelled to convert to a less suitable fuel which has cost them, first of all, £2,500 paid in tax before and during conversion of plant, and, secondly, £2,000 actual cost of conversion, making a total of £4,500.


Is it not a fact that the makers of the coal plants have, in cases where there has been conversion from oil to coal, undertaken to guarantee that the cost will be met out of savings which will ensue from using coal?


I have not the slightest information on that particular point, which seems to be rather hypothetical. I am dealing with facts.


If the right hon. and gallant Gentleman looks into the matter, he will find that it is a fact and not hypothetical at all.


I should call it an advertisement of the coal people who say that they produce these developments. All I can say is that the hospital to which I refer is by no means convinced of its advantage, and, even if they had a financial advantage in changing from oil to coal, they would still think it far better to stay on oil if it were not for the excessive cost of oil. What the hon. Baronet said may be true in the sense that if you put a tax on a particular article and make it more expensive it will be cheaper to use another article which is not cheaper on any other account. The hon. and gallant Member opposite shakes his head. If coal is cheaper why not leave it to the hospital to make a decision in the interests of the sick and the better service for the sick? They have no prejudice in favour of oil. If it be true that it will be cheaper to have coal, and it gives equally efficient service to the sick, they will be only too delighted to change to coal without being compelled to do it by putting up the cost of using oil fuel and diminishing the service which they are able to give to the sick.

Other hon. Members have dealt with the general effect of this tax upon industry. In the case of some industries I see that there is an increase of 25 to 30 per cent. in cost. In the case of the hospital it represents an increase of 42 per cent. in cost. I suggest to the Chancellor of the Exchequer that it would give a real stimulus to a wide range of industries if he would lighten the tax in the way we suggest. He has laid down a principle in this Budget to which I gladly assent, that when we have a surplus to dispose of it should be given to those who made sacrifices in the years since 1931. This is a more recent sacrifice, but it is one bearing very heavily on certain industries at the present time. The burden upon the consumption and development of electricity, upon the consumers of electricity, upon industries which consume oil, upon the employment of labour in those industries, and upon the sick in the hospitals should be removed, or at any rate alleviated, and therefore I associate myself with the hon. Members who have asked the Chancellor of the Exchequer to accept this Clause.

6.36 p.m.


The right hon. and gallant Gentleman stated a little while ago that if the electricity undertakings were to enjoy the relief from this tax which he desires to see, it would cost probably not more than £30,000. The reason why I asked if he had a Clause down to that effect was because he was arguing on a Clause which would have a very different effect—a Clause which halves the duty all round, the cost of which to the Exchequer would not be £30,000, but probably from £1,250,000 to £1,500,000 a year. The whole position has to be faced, and obviously it is not much consolation to say that if I did something quite different from what the Clause asked me to do it would not cost very much money. I have to consider whether I can do what the Clause asks me to do. I would make this further observation and comment on the speech to which we have just listened. The right hon. and gallant Gentleman has used as an instance of what has happened in consequence of the imposition of this tax last year, the case of the hospital, which he said had been compelled to change its whole installation of heating from the use of oil to the use of coal, and he said they had spent a considerable amount of money on the conversion. What would they think of him if he were to induce me to take away the whole object of making this conversion within a year of making it? I do not think he would have a pleasing reception from his friends at the hospital if he were to put them in such a dilemma to-day.

Last year when this tax was first imposed, it is true that it was received with a great deal of opposition from certain quarters of the House, and the arguments put up were fortified by a great number of dogmatic assertions as to the injurious, and indeed disastrous, effect which the tax would have upon certain important industries. I think I remember pointing out at the time that it is only human nature that when a new impost is suggested those who may be liable to it see only the objections, but when they find that the impost is a fact they set themselves for the first time seriously to see how they can mitigate the burden as far as possible. That perhaps is something of the answer I might make to the hon. Member for East Wolverhampton (Mr. Mander) when he triumphantly asked my hon. and gallant Friend the Member for Midlothian and Peebles (Captain A. Ramsay) why it was necessary to put on a duty when, as a matter of fact, coal could beat oil every time.

Previous to the imposition of this duty on oil there was a definite trend from coal towards oil, people being under the impression that oil was for various reasons, partly on account of price, partly on account of ease of handling, and partly for other reasons, better and more efficient for the purpose than coal. That was their impression. One of the reasons which I gave for imposing the duty last year was that I thought it was in the interests of the country that that trend should, if possible, be arrested, and I did so believing at the time that the advantage in the use of coal and its various derivatives had gone a good deal further perhaps than was known to any of those who were undoubtedly attracted at first to the superior advantages of oil.

My hon. and gallant Friend in the very interesting speech which he made a little while ago has given his view and supported it with some instances to show that in fact when manufacturers and other users of fuel are compelled, or are induced by a Measure of this kind, to look and see if there is actually a difference between coal and oil, they find in many cases—perhaps as time goes on they will find more—that they have been mistaken in supposing that oil was better or cheaper for their purpose than coal and its derivatives. Having been, therefore, induced by the slight weighting of the balance to look into the question seriously, they have found that after all the difference, instead of being in favour of oil, was in favour of coal. Obviously, if that be so, then in the national interest the balance is all on one side, because there is no doubt that the coal industry is one which we must all desire to see in a very prosperous condition. There is no industry in the country—I will not say with a higher record of unemployment—in which unemployment on such a large scale is so concentrated as in the case of the coal industry. That is one of the difficulties which make the problem of dealing with unemployment derived from the coal mining industry specially difficult and complex to handle. I am sure that every Member of the Committee would desire to see the coal industry preferred, other things being equal, to a fuel which has to be imported from abroad.

We want to give as much employment as possible to our own people, and we particularly desire to find more employment in the case of coal which has been hit so hard for so many years. The actual advantage which has been derived by the coal industry in the very short time which has elapsed since the imposition of the duty is not, I think, unsatisfactory, and I am now going to try and respond to the invitation of the hon. Member for East Wolverhampton, who with others criticised the tax last year and pointed out the awful lot of damage it was going to do, and review the situation in the light of my experience. As far as the coal industry is concerned, figures have been obtained to show that trade to the extent of nearly 378,000 tons has been regained from oil, and it is also claimed that a further 95,000 tons a year would have been lost to coal but for the tax. That is 473,000 tons, which represent work for about 2,000 miners, and in addition to that it is estimated that about 100,000 tons of coal oil, including creosote, have been sold, or contracted for instead of importing fuel oil for the purpose. A good deal better market has been secured for a lot of this coal oil in consequence of the duty, and the producers, instead of burning it in their furnaces, are now using a low grade coal in its place. This only refers to the first year, and it must be recollected that at the beginning of the year a number of contracts were in force which could not be put an end to immediately, but we already have evidence to show that, as these contracts come to an end, the gain to coal at the expense of oil is still further increased. The Mines Department has expressed the opinion that up to date the results on the whole must be considered highly satisfactory.

We were also given certain industries upon which it was said the tax would have a detrimental effect. There has been a considerable turnover to coal, coke or gas, with satisfactory results, in a large number of industries, including some of those which were specifically brought forward last year as evidence against the tax. Bakeries, industries dealing with food, laundries, textiles, engineering, metallurgy, glass, hotels, offices, hospitals and schools, have all turned over from oil to coal, and satisfactory accounts have been received of the results.

Last year the right hon. and gallant Member for Newcastle - under - Lyme (Colonel Wedgwood) was very strong on the subject of the irreparable damage which would he done to his industry by the tax, and it is interesting to observe that the exports of pottery manufactured in Great Britain in the months May to April amounted in 1933–34 to 2,607,000 cwt., as against a smaller figure of 2,421,000 cwt. in the preceding year. It would appear in that case that in spite of the handicap under which the pottery trade was suffering it was still able to increase its exports as compared with the year before.

One firm of aluminium founders have converted their plant to use 800 tons of coke instead of 500 tons of oil per annum, another aluminium works have decided to replace oil by gas gradually during the next few months, which will increase the consumption of gas by 50,000,000 cubic feet per year, which is equivalent to 3,000 tons of coal. I remember another industry which was mentioned last year, the glass industry, upon which we had a long discussion. The United Glass Pottery Manufacturers, Limited, the largest users of oil, are now consuming coal for the production of gas at their works at the rate of 36,000 tons a year in place of imported oil. The Mines Department has had a conversation with representatives of the firm, who stated that they were satisfied that they could get as good results from the use of gas made on their premises as from oil. That is an instance which I would describe of a firm opposing the new imposition as long as there was any chance of avoiding it, but once it is imposed proceed to see how they can mitigate its effect. One hon. Member has dealt with the nut and bolt industry. I am informed that in that industry, and also in the enamel industry, gas is now superseding oil and giving satisfaction. Let me say a word about the metallurgical trades in the course of my review for the benefit of the hon. Member for East Wolverhampton (Mr. Mander). A firm of manufacturers say: We were doubtful whether we could fire our furnaces at the high temperatures required satisfactorily with coal, but it has proved in practice to be quite successful few plant was installed as a result of the tax on oil fuel. Hitherto the plant was running on oil fuel, and the results have been entirely satisfactory; they have resulted in a considerable saving in the cost of fuel. It has been reported to the Mines Department that one of the directors of this firm was a member of a deputation which called upon the Chancellor of the Exchequer to demand that he should remove the tax, but this director now says that he wishes to thank the Chancellor of the Exchequer for putting the tax on as he finds that it has meant a saving in fuel costs.


Can the right hon. Gentleman tell us the position of the manufacturers of oil engines in this country to-day?


I am not an encyclopaedia on all the industries of the country, and I cannot at a moment's notice give particulars about the manufacture of oil engines, but my hon. Friend will no doubt remember that one of the reasons I gave for the imposition of the tax was that we must preserve some balance in our taxation system, that it was an anomaly to say that a particular kind of fuel should be exempt from taxation altogether. From the point of view of bringing in revenue, which was the third reason I gave, the tax has been highly satisfactory, and in view of a revenue of £2,800,000 as against an estimate of £2,000,000, whatever I said in favour of the tax last year the result of my review of the last 12 months is only to convince me that I did not say enough in its favour. It has done all I expected it to do, rather more in fact, and there is not the slightest justification for suggesting now that it should be reduced, much less abolished.

6.52 p.m.


I did not gather whether the right hon. Gentleman was defending the high rate of this tax because it was a protection and stimulus to coal or on the basis of revenue. I suggest that if the rate of the duty were reduced, there would be some compensation by an increased consumption of the article. The right hon. Gentleman admitted that, in spite of the heavy tax, consumption is still going up. His figures prove that. In other words, there are still hundreds of industries in this country which, owing to special circumstances, are compelled to use oil instead of the cheaper, the untaxed commodity, coal. He put in a strong appeal for coal, and, naturally it is a strong appeal. There is no industry which has gone through a more serious time, with more unemployment, more reduction of capital values, than the coal industry, and it must necessarily make a strong appeal to the Com- mittee. But coal is an old fuel and has had a big start on oil. It is available in the country, and our industries were founded and based on the use of coal. Oil was only introduced as a necessity in order to compete with foreign countries. The right hon. Gentleman paid me the compliment, which I very much appreciate, of quoting me in his speech on the Second Reading of the Finance Bill. I did not know that he took the trouble to remember anything I said. He quoted me as saying that there was only one real remedy for unemployment and that was a revival of trade and getting people back into industry. That is a truism, and I do not think it was necessary for the right hon. Gentleman to search the pages of the OFFICIAL REPORT in order to get inspiration for such an obvious remark.

What is the position of this country at the moment? There is no real remedy for the great army of unemployed except a revival of trade. In his Budget speech the right hon. Gentleman pointed out that any chance of a revival of trade in this country must be looked for in our export trade; that largely the home demand was being satisfied and that if we are to get more people into our workshops and factories, and our industries working full time, we must look to the world markets. Anybody connected with our foreign trade knows the severe competition which exporters in this country have to face. It is keen, new countries are coming in, new plant, new machinery, new methods, new ideas and new organisations, are being introduced, and it is essential that our industries should be established on the best possible basis, and be able to get the advantage of the latest machinery, the newest methods and, most important of all, the most economical fuel. The right hon. Gentleman took pains to prove that the glass industry, pottery and textiles had substituted coal for oil. Why? Not because it is more efficient or more economical but because he himself has interfered, by putting his clumsy hands on their plant, imposing a tax and forcing them to use something less efficient for their purpose. It may be that in our complicated industrial system some trades will not suffer and there may be examples that the coal industry, stimulated by competition, has introduced machinery which use coal as efficiently as gas, but I think the right hon. Gentleman will be the first to admit that with a highly organised industrial country like ours, with so many kinds of industries, you are going to handicap some trades by putting a tax upon what they have found to be the best and most economical fuel for the running of their factories.

We are not asking for anything unreasonable. It is not possible to change suddenly from one form of fuel to another, and all we are asking is that as coal has had this 12 months' premium, the tax should not be abolished but reduced to a more reasonable level. I wonder what would have been the fate of this country in the 19th century if we had had a Chancellor of the Exchequer with the principles, views and ideas of the right hon. Gentleman. What an outcry there would have been when steam was introduced. With the weavers calling for the destruction of steam plant and for hand looms to be retained the right hon. Gentleman would have come along and protected the hand-loom weavers by putting a tax on coal. The same thing would have happened when steam was substituted for water power. Now, when certain industries have found that oil is the most efficient for their purpose, the Chancellor of the Exchequer comes along and interferes with the progress of industry and scientific experiments, and tries to handicap our manufacturers in their competition with the rest of the world. I suggest that he should study my speeches again. If he has profited from a study of them a year ago, he may get wisdom by studying them in 1934.

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

The CHAIRMAN (Sir DENNIS HERBERT) collected the voices, and declared that the Noes had it.


On a point of Order. May I point out, Sir Dennis, that directly you put the Question I shouted "Aye"?


It is perfectly certain there was no "Aye" response in time. I paused and I did not hear a sound. After having put the Question to the "Ayes," I put the question to the "Noes." I collected the voices, and I had done so before any protest was made at all.


Might I ask your indulgence? We did call out. It would be a great concession to us to divide.


Some of us really did say "Aye." We did intend to divide.


I am very sorry to put any party in an awkward position, but I think the Committee generally will be with me when I say that nobody shouted out, and, if they did, it did not reach the Table. If it is the general sense of the Committee that some indulgence should be given, I will put the Question a second time.

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

The Committee divided: Ayes, 30; Noes, 282.

Division No. 282.] AYES. [7.3 p.m.
Banfield, John William Jones, J. J. (West Ham, Silvertown) Salter, Dr. Alfred
Dobbie, William Kirkwood, David Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Evans, David Owen (Cardigan) Leonard, William Strickland, Captain W. F.
George, Megan A. Lloyd (Anglesea) McGovern, John Thorne, William James
Gardner, Benjamin Walter Maclean, Nell (Glasgow, Govan) West, F. R.
Griffith, F. Kingsley (Middlesbro', W.) Mallalieu, Edward Lancelot White, Henry Graham
Groves, Thomas E. Mander, Geoffrey le M. Wilmot, John
Hamilton, Sir R.W. (Orkney & Z'tl'nd) Mason, David M. (Edinburgh, E.) Young, Ernest J. (Middlesbrough, E.)
Harris, Sir Percy Milner, Major James
Holdsworth, Herbert Nathan, Major H. L. TELLERS FOR THE AYES.—
Jones, Henry Haydn (Merioneth) Owen, Major Goronwy Mr. Walter Rea and Mr. Harcourt
Acland-Troyte, Lieut.-Colonel Atholl, Duchess of Beaumont, Hon. R.E.B. (Portsm'th, C.)
Adams, Samuel Vyvyan T. (Leeds, W.) Balllie, Sir Adrian W. M. Bell, Sir Alfred L.
Agnew, Lieut.-Com. P. G. Baldwin, Rt. Hon. Stanley Blindell, James
Allen, Sir J. Sandeman (Llverp'l, W.) Balfour, Capt. Harold (I. of Thanet) Borodele, Viscount
Allen, Lt.-Col. J. Sandeman (B'k'nhd.) Balniel, Lord Bossom, A. C.
Allen, William (Stoke-on-Trent) Banks, Sir Reginald Mitchell Boulton, W. W.
Anstruther-Gray, W. J. Barclay-Harvey, C. M. Bower, Lieut.-Com. Robert Tatton
Applin, Lieut.-Col. Reginald V. K. Beauchamp, Sir Brograve Campbell Bowyer, Capt. Sir George E. W.
Aske, Sir Robert William Beaumont, M. W. (Bucks., Aylesbury) Bracken, Brendan
Bralthwalte, J. G. (Hillsborough) Hellgers, Captain F. F. A. Ramsay, Capt. A. H. M. (Midlothian)
Brats, Captain Sir William Heneage, Lieut.-Colonel Arthur P. Ramsden, Sir Eugene
Broadbent, Colonel John Hepworth, Joseph Ray, Sir William
Brocklebank, C. E. R. Hills, Major Rt. Hon. John Waller Reed, Arthur C. (Exeter)
Brown, C. W. E. (Notts., Mansfield) Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. Reid, Capt. A. Cunningham.
Brown, Col. D. C. (N'th'l'd., Hexham) Hore-Belisha, Leslie Reid, William Allan (Derby)
Brown, Brig. -Gen. H.C. (Berks., Newb'y) Hornby, Frank Remer, John R.
Buchan-Hepburn, p. G. T. Horsbrugh, Florence Rickards, George William
Burnett, John George Howard, Tom Forrest Roberts, Sir Samuel (Ecclesall)
Burton, Colonel Henry Walter Howitt, Dr. Allred B. Ropner, Colonel L.
Butt, Sir Alfred Hudson, Capt. A. U. M. (Hackney, N.) Rosbotham, Sir Thomas
Campbell, Sir Edward Taswell (Brmly) Hudson, Robert Spear (Southport) Ross Taylor, Walter (Woodbridge)
Campbell-Johnston, Malcolm Hume, Sir George Hopwood Ruggies-Brise, Colonel E. A.
Cape, Thomas Hunter, Dr. Joseph (Dumfries) Runge, Norah Cecil
Caporn, Arthur Cecil Hunter, Capt. M. J. (Brigg) Russell, Albert (Kirkcaldy)
Carver, Major William H. Kurd, Sir Percy Russell, Alexander West (Tynemouth)
Cayzer, Sir Charles (Chester, City) Hutchison, W. D. (Essex, Romf'd) Russell, Hamer Field (Sheffield, B'tside)
Cayzer, Maj. Sir H. R. (Prtsmth., S.) Inskip, Rt. Hon. Sir Thomas W. H. Rutherford, John (Edmonton)
Cazalet, Thelma (Islington, E.) Jackson, Sir Henry (Wandsworth, C.) Rutherford, Sir John Hugo (Liverp'l)
Cazalet, Capt. V. A. (Chippenham) James, Wing-Com. A. W. H. Salmon, Sir Isidore
Chamberlain, Rt. Hon. N. (Edgbaston) Jameson, Douglas Salt, Edward W.
Churchill, Rt. Hon. Winston Spencer Jenkins, Sir William Samuel, Sir Arthur Michael (F'nham)
Clarry, Reginald George Jesson, Major Thomas E. Sandeman, Sir A. N. Stewart
Clayton, Sir Christopher John, William Sassoon, Rt. Hon. Sir Philip A. G. D.
Clydesdale, Marquess of Jones, Lewis (Swansea, West) Savery, Samuel Servington
Cobb, Sir Cyril Ker, J. Campbell Scone, Lord
Cochrane, Commander Hon. A. D. Kerr, Lieut.-Col. Charles (Montrose) Selley, Harry R.
Cocks, Frederick Seymour Kerr, Hamilton W. Shaw, Helen B. (Lanark, Bothwell)
Colfox, Major William Philip Kimball, Lawrence Shaw, Captain William T. (Forfar)
Cook, Thomas A. Lamb, Sir Joseph Quinton Smiles, Lieut.-Col. Sir Walter D.
Cooper, A. Duff Lambert, Rt. Hon. George Smith, Louis W. (Sheffield, Hallam)
Copeland, Ida Latham, Sir Herbert Paul Smith, Sir Robert (Ab'd'n & K'dine, C.)
Courthope, Colonel Sir George L. Law, Sir Alfred Smithers, Sir Waldron
Craddock, Sir Reginald Henry Law, Richard K. (Hull, S. W.) Somerset, Thomas
Cranborne, Viscount Lees-Jones, John Somerville, Annesley A. (Windsor)
Crooke, J. Smedley Lennox-Boyd, A. T. Somerville, D. G. (Willesden, East)
Crookshank, Capt. H. C. (Gainsb'ro) Liddall, Walter S. Soper, Richard
Cross, R. H. Little, Graham-, Sir Ernest Southby, Commander Archibald R. J.
Daggar, George Lockwood, John C. (Hackney, C.) Spencer, Captain Richard A.
Dalkeith, Earl of Lockwood, Capt. J. H. (Shipley) Spens, William Patrick
Davies, Edward C. (Montgomery) Loder, Captain J. de Vere Stanley, Rt. Hon. Lord (Fylde)
Davies, David L. (Pontypridd) Loftus, Pierce C. Stanley, Hon. O. F. G. (Westmorland)
Davies, Maj. Geo.F. (Somerset, Yeovil) Lovat-Fraser, James Alexander Stewart, J. H. (Fife, E.)
Denville, Alfred Lumley, Captain Lawrence R. Stones, James
Dickle, John P. Lyons, Abraham Montagu Storey, Samuel
Dixon, Rt. Hon. Herbert MacAndrew, Capt. J. O. (Ayr) Stourton, Hon. John J.
Drewe, Cedric Macdonald, Gordon (Ince) Strauss, Edward A.
Drummond-Wolff, H. M. C. Macdonald, Sir Murdoch (Inverness) Stuart, Hon. J. (Moray and Nairn)
Duckworth, George A. V. Macdonald, Capt. P. D. (l. of W.) Sueter, Rear-Admiral Sir Murray F.
Duggan, Hubert John McKie, John Hamilton Sugden, Sir Wilfrid Hart
Duncan, James A. L. (Kensington, N.) McLean, Major Sir Alan Tate, Mavis Constance
Eady, George H. McLean, Dr. W. H. (Tradeston) Templeton, William P.
Eales, John Frederick Macquisten, Frederick Alexander Thomas, Major L. B. (King's Norton)
Edmondson, Major Sir James Mainwaring, William Henry Thompson, Sir Luke
Edwards, Charles Manningham-Buller, Lt.-Col. Sir M. Thomson, Sir Frederick Charles
Ellis, Sir R. Geoffrey Margesson, Capt. Rt. Hon. H. D. R. Thorp, Linton Theodore
Elliston, Captain George Sampson Mason, Col. Glyn K. (Croydon, N.) Tinker, John Joseph
Elmley, Viscount Mayhew, Lieut.-Colonel John Todd, Capt. A. J. K. (B'wick-on-T.)
Emmott, Charles E. G. C. Mills, Major J. D. (New Forest) Touche, Gordon Cosmo
Emrys-Evans, P. V. Milne, Charles Train, John
Entwistle, Cyril Fullard Monsell, Rt. Hon. Sir B. Eyres Tryon, Rt. Hon. George Clement
Essenhigh, Reginald Clare Moreing, Adrian C. Tufnell, Lieut.-Commander R. L.
Evans, Capt. Arthur (Cardiff, S.) Morrison, G. A. (Scottish Univer'ties) Turton, Robert Hugh
Fox, Sir Gilford Morrison, William Shepherd Ward, Irene Mary Bewick (Wallsend)
Fremantle, Sir Francis Munro, Patrick Ward, Sarah Adelaide (Cannock)
Ganzonl, Sir John Nicholson, Godfrey (Morpeth) Wardlaw-Mline, Sir John S.
Gillett, Sir George Masterman Nicholson, Rt. Hn. W. G. (Peterst'ld) Warrender, Sir Victor A. G.
Gilmour, Lt.-Col. Rt. Hon. Sir John Normand, Rt. Hon. Wilfrid Waterhouse, Captain Charles
Gluckstein, Louis Halle O'Connor, Terence James Wayland, Sir William A
Goff, Sir Park O'Neill, Rt. Hon. Sir Hugh Wedderburn, Henry James Scrymgeour.
Grattan-Doyle, Sir Nicholas Ormsby-Gore, Rt. Hon. William G. A. Wells, Sydney Richard
Greaves-Lord, Sir Walter Peake, Captain Osbert Whyte, Jardine Bell
Griffiths, George A. (Yorks, W. Riding) Pearson, William G. Williams, David (Swansea, East)
Griffiths, T. (Monmouth, Pontypool) Penny, Sir George Williams, Dr. John H. (Llanelly)
Grimston, R. V. Perkins, Walter R. D. Wills, Wilfrid D.
Gritten, W. G. Howard Petherick, M. Wilson, Clyde T. (West Toxteth)
Grunay, Thomas W. Peto, Sir Basil E. (Devon, Barnstaple) Windsor-Clive, Lieut.-Colonel George
Guinness, Thomas L. E. B. Peto, Geoffrey K. (W'verh'pt'n, Bliston) Winterton, Rt. Hon. Earl
Gunston, Captain D. W. Pike, Cecil F. Wise, Alfred R.
Guy, J. C. Morrison Potter, John Withers, Sir John James
Hacking, Rt. Hon. Douglas H. Powell, Lieut.-Col. Evelyn G. H. Womersley, Sir Walter
Hales, Harold K. Pownall, Sir Assheton Worthington, Dr. John V.
Hamilton, Sir George (Ilford) Procter, Major Henry Adam
Hanley, Dennis A. Pybus, Sir Percy John TELLERS FOR THE NOES—
Hartington, Marquess of Radford, E. A. Dr. Morris-Jones and Lieut.-Colonel
Haslam, Sir John (Bolton) Raikes, Henry V. A. M. Sir A. Lambert Ward.

Bill read a Second time, and committed to a Standing Committee.