HC Deb 18 June 1934 vol 291 cc85-117

Sub-section (1) of Section six of the Finance Act, 1933 (which reduced the rate of rebate on certain hydrocarbon oils), shall cease to have effect, and as from the seventeenth day of April, nineteen hundred and thirty-four, the rate of rebate to be allowed under Sub-section (3) of Section two of the Finance Act, 1928, on the delivery for home consumption of any oils other than light oils shall be eightpence per gallon.—[Mr. Leonard.]

Brought up, and read the First time.

6.40 p.m.


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

In moving this Clause, I desire to deal specifically with one type of industry. There is no denying the fact that since this duty was imposed a certain section of industry has suffered a considerable burden. I refer to industries which function, in the main, close to industrial centres and large towns and cities and particularly those concerned with the distributive trades. Those industries connected with the distributive trades have in the past answered to a considerable extent the appeals made to them by local authorities to help in the great work of purifying the atmosphere and removing the palls of smoke which at the present time constitute such a menace to the health of the people in industrial areas. Not only has there been a response by industries of that type to such appeals, but they have themselves indulged in a great deal of advertising in connection with the efforts which they have been making both to purify the products which they present for consumption to the public and to purify the air in the localities where their works are situated.

In Glasgow the smoke abatement inspectors have applied themselves to this work in a magnificent manner, and for some years past they have not only visited large factories in order to acquaint those responsible, with the advantages of scientific firing, but they have held classes at which firemen accustomed to the use of coal fuel have been asked to attend. Notwithstanding the advantages to be derived from these courses of instruction, the results have not been fully to the satisfaction of those officials as regards getting away from the difficulties associated with coal-burning. In a previous reply on this subject, the Chancellor of the Exchequer gave details as to the number of factories which had turned from the use of coal and coke to the use of gas, but that is not always a suitable medium and is not available in all localities. There are localities that have had recourse to oil-burning in order to keep the atmosphere clear, and because of that fact I am putting forward this Clause and endeavouring to allow such organisations as are concerned to escape the imposition which has been placed upon them.

With regard to the price of fuel oil, I am informed that the present price is 52s. 6d. per ton, which works out at 2½d. per gallon, so that last year's imposition of 1d. per gallon placed an increased cost of 40 per cent. on the working of these factories, and that, I think, is something to which the Chancellor should pay some attention. A London co-operative society, of which I have some details, have had to meet last year, because of this 1d. on the cost, no less a sum than £4,000. That has to be met, and other industries will be placed in the same position. The Wholesale Co-operative Society, which uses a tremendous lot of this fuel, has had to meet, this last year, no less than £26,000 extra taxation put on by the Finance Act of last year. Therefore, I suggest that in putting forward this proposal we are not only helping the industries that have responded to the appeal made by local authorities in the past in order to make the air purer, but we are also helping many industries of an exporting character, and they have sufficient difficulties at the present time without any further imposition being placed upon them.


I beg to second the Motion.

6.48 p.m.


I desire to raise the question, in connection with this Hydrocarbon Oils Duty, of civil aircraft. The Chancellor of the Exchequer will remember the extra tax on petrol which was put on by the emergency Budget of Mr. Snowden, as he then was, in September, 1931. That was a very great burden, not only upon the motoring industry, but also upon the young and ever-growing civil aircraft industry, and the Chancellor of the Exchequer has this year seen fit to make some reduction of the burden for the ordinary motorist in this country. He has reduced the licence duties upon motor vehicles which move along the roads by, I think, 25 per cent., and, of course, that in some way goes to neutralise the extra taxation imposed by the Budget of 1931, but, as far as civil aircraft are concerned, they have received no concession at all similar to that received by the motoring community. I should like to ask the Chancellor of the Exchequer whether it will be possible for him to consider a total remission of the duty on petrol when used by civil aircraft or whether he could go some way towards making us a reduction?

The amount at stake is not very great. I have been to a considerable amount of trouble with the various petrol companies to find out the amount of petrol which is used by civil aircraft in this country, and I find that of the total amount used, only about 3,250,000 or 3,500,000 gallons were used by civil aircraft last year; and of the total petrol duty of £36,000,000 last year, only£ll6,500 was the amount paid on petrol used by civil aircraft. Therefore, it will be clear to my right hon. Friend that the amount at stake, so far as the Exchequer is concerned, is a matter of £116,500, if he gave a complete remission of the duty on petrol for civil aircraft. I am not including in those figures, of course, any petrol used by the machines of the Royal Air Force. It must be obvious to all Members of the House what a great stimulus it would be to civil aviation in this country if the Chancellor of the Exchequer could make some concession.

May I put the position, first of all, of the large aircraft companies which are operating in this country? As the Chancellor is aware, Imperial Airways, which receive a large subsidy from the Government, of approximately £500,000 a year, pay very little in petrol duty, because, as is well known, any aircraft leaving for abroad gets a remission on that amount of petrol which it takes in its tanks when it leaves the shores of England. Therefore, the chief burden of the tax of 8d. per gallon falls on the unsubsidised aircraft, which have recently been developed in this country, and I think the House generally will be in agreement with me when I say that it is the small concerns, which are beginning to be of such enormous value throughout the country to-day in assist- ing our communications, which really should receive some consideration from this House and from the Chancellor.

If I may, I will pass from that to another very important section, which I look upon as probably the most important movement for our national life to-day, and that is the light aeroplane club movement and the flying schools. Of this total petrol consumption which I have given of some 3,500,000 gallons a year, 500,000 gallons, or one-seventh, are used by the flying clubs and schools, and I think it is of enormous importance for this country that we should make it as easy and as cheap as possible for people to learn to fly in these various clubs and schools. Very often I have heard people say, "I have just got enough money to take out an 'A' licence, but I am afraid I shall not be able to join a club for flying, because the costs of flying are too high."

Therefore, I should like to show what effect a rebate would have on the figures of one of these light aeroplane clubs, and I take the one with which I am associated, the Leicestershire Club. We charge 36s. an hour for a certain section of people learning to fly, and 28s. for another section. The cost per hour of running our machines—flying time—is about 50s., and the average receipts work out at about 30s., which makes a loss of 20s. on every hour flown. At present that is made up by 9s. subsidy and l1s. subscriptions of members and profits of one sort and another that the club can produce. In this particular club, 1,100 hours were flown last year, and if the Petrol Duty could be withdrawn, it would enable us to reduce our rate to our members by no less than 4s. 6d. per hour. I think it must be clear to everybody, to hon. Members opposite as well as to hon. Members on this side, that if we are to get a large reserve of people who have not only learned to fly but who have kept in training and are able to fly to-day, we must get these costs of instruction and of flying down, and this is one of the ways in which the Chancellor of the Exchequer could really assist us very materially. After all, 4s. 6d. or 5s. an hour to a man not very well off—perhaps a clerk who comes in the evening to learn to fly at one of the clubs around London, or someone in my own division, or someone from the City of Leicester who wants to learn to fly after work—makes an enormous dif- fernce, and I stress that point very strongly. The Chancellor of the Exchequer would help enormously to increase the number of trained pilots in this country if he could make us this concession.

There is one other point that I would like to put forward. From the point of view of the aircraft industry, it is abundantly necessary that British aircraft engines should be the best and most powerful in the world, and the question of the Petrol Tax and the use of petrol by these companies and, indeed, by people purchasing engines from them very materially affects the design of these engines. It is probably true to say that the reason the United States of America have so much faster aeroplanes and aircraft engines than we have for ordinary commercial flying is that they have not the same burden put upon their civil aviation, because they have a higher subsidy—for which I am not asking to-day—and because also they have not the same burdens to contend with and their Government treat them more liberally. If our aircraft engine manufacturers could obtain this small rebate, I believe it would materially affect the design of aircraft engines and that we should be able in this country to produce more powerful engines, to the advantage not only of civil flying but of the defence of our own nation.

The right hon. Gentleman the Chancellor of the Exchequer may say that it is difficult to make any concession, but I purposely framed my Clause on the lines of the Finance Act, 1928, when the Chancellor of the Exchequer gave a remission of duty. Under it, the owner would fly his machine or the club machine and in six months' time would send in to the Excise officer a detailed list of the hours his engine had run. He would take from the manufacturer the average amount of petrol which that engine consumed in an hour, a very well known figure, and it would be for the local Customs man, as indeed he does in many other cases, to examine the log books of the aircraft concerned to see whether or not that number of hours had been flown. There would be very little likelihood of anybody trying to make out that an aeroplane had flown a longer number of hours than it actually had, because, as a matter of fact, the average club machine uses six gallons of petrol per hour, and if you put in an extra 100 hours' flying in a year, you would only get £20 back in Petrol Duty, but you would actually reduce the value of your machine by double or treble that amount. I hope very much that the Chancellor of the Exchequer will treat this case with some sympathy, and if he cannot do anything now, perhaps he will give the matter his full consideration, in order that he may do something to further the interests of those who are connected with civil aviation.

6.59 p.m.

Rear-Admiral Sir MURRAY SUETER

I rise to support the new Clause standing on the Paper in the name of my hon. Friend the Member for Melton (Mr. Everard), and I ask the Chancellor of the Exchequer to give this concession if he possibly can, for one reason and one reason only, and that is that we are so behindhand in civil aviation in this country. Compared with the other nations, we only have a few hundred civil aircraft, while America has thousands of them, and Germany has thousands of them, and it is the same with France. If hon. Members will only look at the number of hours flown in other countries, they will find that America is first, Germany second, France third, and this country sixth. I do ask the Chancellor of the Exchequer to look into this matter and see if he cannot give some encouragement to civil aviation. The hon. Member for Melton said it would reduce the cost of flying by 5s. an hour. I always hear from people who want to fly the complaint of the great cost. If the Chancellor of the Exchequer reduced that cost, he would help young men and young women to fly. We should encourage in every way possible the young people to take up flying. My hon. Friend the Member for Melton is a pilot himself and flies about Germany and France. He will agree, I know, that if anyone visits Germany he will see the encouragement given there to flying. When I was in Berlin on naval duty some years ago I noticed especially the encouragement given to young people to be air-minded. The same thing happens in France. In this country we have great difficulty in getting aerodromes, and then there is the great cost that fliers have to meet to get into the air. I would ask the Chancellor of the Exchequer to consider this Clause. I am glad to see that the Under-Secretary of State has entered the Chamber, and we would ask the hon. Baronet to press on the Chancellor of the Exchequer that this concession be made. As my hon. Friend the Member for Melton said, £116,500 is paid in Petrol Duty, and this is a small sum. I ask the Chancellor of the Exchequer to help the airmen all he possibly can.

7.2 p.m.


I should like to associate myself with the appeal of the hon. Member for Melton (Mr. Everard) to the Chancellor of the Exchequer. In doing so I should like to bring forward for one moment the anomalous position of the Petrol Duty in aviation, in the hope that consideration of this anomaly will give added appeal to that sense of justice of the Chancellor of the Exchequer which we know he possesses. The hon. Member for Melton says that £116,500 was paid by aviation in petrol tax, and I find that a total of £36,000,000 was collected by the tax, of which £25,000,000 was appropriated for roads. The proportions are as 36 to 25 or 116 to 78. Therefore, you may deduce that of £116,500 paid by civil aviation, no less than £78,000 went straight to roads which aircraft do not use, except on unfortunate occasions when the wings are dismantled, and they have to be dragged home. It is rather unfair that aviation should pay this very considerable sum for advantages it does not possess or make any use of—in fact does not wish to associate itself with. It does not use the roads, causing wear and tear, and on that ground I cannot see how this anomalous position can be justified. One more anomaly. This is robbing Peter to pay Paul. You are taking £116,500 from aviation, and, on the other hand, giving a sum of £663,000 as a subsidy.

As regards machinery, I am not quite sure of the difficulties of administration advanced, because fishing coastal boats were relieved of this petrol tax burden. If in the case of fishing coastal boats this can be done, surely it can be done in the case of this new industry. This is one of the new industries springing up taking the place of old industries, such as the coal industry and the cotton industry which may never revive, and it is taking its place among the new industries in the world as a leading pioneer. I appeal to my right hon. Friend to give this deserved encouragement to an industry, which pioneering efforts have built up to the present position. Sacrifices have been made of money and lives, and the Govern-men have encouraged civil aviation in nearly every way possible.

7.7 p.m.


May I briefly add my appeal to the Chancellor of the Exchequer with regard to this tax on petrol for flying? The hon. and gallant Member for Thanet (Captain Balfour) has just adduced one argument why this tax is in fact inequitable. May I give my right hon. Friend another view? If one takes a five- or six-seater car of 16 to 20 horsepower, it uses a gallon of petrol to about every 16 miles, or a tax of a halfpenny per mile. If we take a five- or six-seater aeroplane using 12 gallons an hour, assuming that craft travels at 100 miles an hour cruising speed, it pays a tax of 8s. per hour. That aircraft is in fact paying a penny per mile for the roads it does not use, whereas the car is paying a halfpenny n mile for roads it does use. If anything could bring home to my right hon. Friend how unjust and hard this tax is on aircraft and aircraft operators, this should. That is not the whole story. One is apt to think of aircraft paying this tax and then being free of other duties. That is by no means the case. Aircraft pay to the Treasury £173,000 in dues of one sort and another, mostly in connection with landing. If there is anything comparable to use of the roads it is these dues. If they are paying a lump sum such as this for landing, it is very hard for them to pay again through the petrol tax. I think the National Government may take even a broader view than that.

The Minister of Transport is continually urging the necessity for greater care on the roads. One way of making the roads safer is to clear them of people who need to get to places quickly. If, therefore, we could induce those people to take to the air, there is not the slightest doubt that it would tend to make the roads safer. I think that is a point to remember when the Government is urged further to find a solution for the terrible toll of death on the road. If we take the cost of the Royal Air Force, it works out that every aircraft and pilot cost the State £20,000 a year. A civil aeroplane may in time of war be of equal value to the State as some of those which the State is paying enormous sums each year to maintain. I do hope the Chancellor of the Exchequer, urged by the Under-Secretary of State, will see his way clear to take the broadest possible view of this matter. If there is one question upon which I am somewhat drawn to dictators it is this fact that they all seem to be extraordinarily air-minded. Every one of them has put the development of the air in the forefront of his national programme. But I do not believe that is necessarily only a feature of dictatorship, I believe that the National Government, particularly one whose finance is in the hands of one so able as my right hon. Friend, is capable of equal enthusiasm where the case is so clear and forthright.

7.12 p.m.


I wish to add my appeal to that of the hon. Member for Melton (Mr. Everard) in asking for this concession. With my hon. Friend who has just sat down, I do not desire to dissent, except to say that when he tells us dictators are air-minded, I would say not so much air-minded as hot air-minded. It has long been felt that aviation is suffering to-day from a serious and inequitable burden in being called upon to pay a tax on a fundamental necessity, for petrol is the source of power behind every flight. Aviation to-day is no longer a luxury, and is appealing to the whole of the populace. Our desire is to make the whole community air-minded. Aviation is unlimited in its appeal to all sections of the community. We see light aeroplane clubs established, first for flying, then for instruction and then these clubs are used, and should be used, by people who take advantage of the amenities offered otherwise than for flying. In road transport so far as privately-owned motor cars are concerned, there is in individual ownership still some element of luxury remaining. It may be argued that there is some case for taxation, even if taxation does not remain so high in incidence.

With regard to aeroplanes, however, it seems that every private owner is a source of strength to the State. If there is one thing that has to be encouraged in these days it is light aeroplane ownership, which is not a matter of individual advancement so much as national progress and security. So far as commercial air transport is concerned, it makes a great effort to become self-supporting. My hon. Friend the Member for Melton dealt with the position of Imperial Airways, and one days not want to decry the great work they are doing throughout the Empire, but they are in a peculiar position. We do desire that the light aeroplane owner should be advanced in every way, and invited by every conceivable method to go further than the flying to which he has turned his hand, and we want to invite the people to the aeroplane. We need not discuss now the need for certain emergency measures that were necessary in 1931, for the financial stress then existing does not operate to-day. Largely due to the work of the National Government that financial stress of the country has been eased.

I join in the voices that have already been heard in asking the Chancellor to make some concession with regard to aeroplanes. It happens that in the city and county of Leicester, with which both my hon. Friend the Member for Melton and I are proud to be associated, there is a very successful aeroplane club. We find that something like 4s. 6d. an hour goes to the State in petrol taxation by everybody who employs an aeroplane from that institution. That puts a brake upon the development of civil aviation. We want to see that brake come off, because we feel that it operates as an injustice to those who are concerned in doing their best to further the cause of civil aviation. It retards utilisation in commerce and in tuition.

May I say a word about flying schools and light aeroplane clubs, because it occurs to some of us that they in particular are more than ordinarily prejudiced? A refund of the Petrol Duty to these organisations would mean that the cost of tuition would decrease, and there would be a greater incentive and greater opportunities for the general public to take up flying, and there would be a consequent benefit to everybody concerned. I want to reiterate, and it cannot be repeated too often, that flying is no longer the privilege of the few. We want to see the whole country, irrespective of section or class, air-minded, because this is a national matter in which the whole community should become, and desires to become, interested. The way to encourage and promote civil aviation is to give this concession, which could be given without any prejudice to the nation.

May I remind the House that there is a grant given to light aeroplane clubs? Last year, I believe, they received something like £13,000. So far as can be ascertained, these clubs paid back to the State in Petrol Duty something like £15,000. The flat rate of 8d. per gallon taxation operates both on aeroplanes and motor cars, and the view we desire to submit to the Chancellor is that it operates somewhat harshly and unfairly on the light aeroplane owners and the light aeroplane clubs. They do not use the roads but the air, and they have all the incidental expenses to pay just the same, but they are called upon to pay the same 8d. per gallon tax as the motor car drivers while in no way having the same facilities given them by the roads that are maintained in this country. When it is realised that while £13,000 is received something like £15,000 goes back to the State, it will be agreed that it is a little hard that there should be this limitation of subsidy on the one hand and the same incidence of taxation on the other. We believe that if this tax could be reduced, or if my right hon. Friend the Chancellor of the Exchequer could see his way to offer a ray of hope in the immediate future, people of this country would be induced to fly more, to become more competent and better trained, to spend more flying time in the air. The light aeroplane clubs would be able to run at less loss in their flying than they do to-day, and there would be a great national asset in a big reserve of pilots and air-minded people in the case of any emergency. More and more would the aeroplane be used in trade. The reduced cost of operation would induce many people who might then be able to afford it to possess their own aeroplane, and that would help to build up a strong aircraft industry.

In his desire to increase the motor trade and to promote the employment of those concerned, my right hon. Friend thought fit to make a concession in the case of the horse-power tax on motors. There can be no doubt that the whole country—not merely the manufacturers but the users as well—is grateful for that concession. There can be no doubt that that aid will be of great benefit to the motor car industry and to the trade and employment in that industry. These are matters about which there can be no doubt. Is it too much to ask my right hon. Friend, with the same eye to the future and the same desire to protect a great trade, with the same concern that he always has for national affairs, that he will offer this concession and so give an encouragement to an industry, to a science, which is no longer confined to one limited class but which is really national in its enjoyment and nation-wide in its outlook, for which there is the need for this additional fillip to give this country the leadership in civil aviation that so many of us desire?

7.21 p.m.


I feel some sympathy with the Chancellor of the Exchequer when he has such excellent arguments put before him from all sides of the House for rebates and reductions of duty which inevitably must make a hole in his Budget. The arguments that are put before him in connection with hydrocarbon oils are powerful, because there is not one of us who would not like to see all sources of power free from taxation. That is the ideal way of approaching this subject. Nothing can more seriously handicap an industrial country than that its sources of power should be taxed, and in some cases very heavily taxed. In the old days, when coal was practically the only source of power, who in his senses would ever thought of taxing it? Now we have got new sources of power in hydrocarbon oils. We have a source of power that competes very seriously with coal, and it is a matter of grave consideration whether we may not be seriously handicapping ourselves in our future as an industrial country if we place too heavy taxation upon these new sources of power in order to bolster up the old source—coal.

I do not think that the country half realises yet what the future developments of the heavy oil engine may be. I can visualise a time, not very far distant, in which coal will no longer be burned on our great railways as it is burnt to-day. We shall have heavy oil engines generating electricity and stream-lined trains travelling at 100 miles an hour instead of 60 miles an hour. Will the Chancellor of that day be prepared to say that such development shall not take place because it puts miners out of work? These are very serious considerations. I should like to ask the House to look at the reasons which were given by the Chancellor of the Exchequer in the Debate on the Committee stage for the action he has taken and intended to continue to take. In the first place, he said he intended to weight the balance in favour of coal and employment. I will quote his words: 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."—[OFFICIAL REPORT, 12th June, 1934; col. 1602, Vol. 290.] There is not one of us who does not regret to see miners out of work because coal is not wanted, but we ought to consider what is meant by the right hon. Gentleman's expression "other things being equal." Are other things equalled in this case? Is it more important that a certain number of miners shall be back at work and continue in work if that is going to handicap the future industrial development of the country? That is a question which requires very serious consideration, land I should like to draw the attention of the House to a letter which some hon. Members may have seen which appeared in the "Times" the other day from Mr. F. L. Halford, with reference to the position in Germany. He said: In spite of Germany's great need of revenue and her desire to do everything in reason to help her coal industry, she has come to the conclusion that unemployment would be increased and damage done to her general trade by any increase in the tax on the fuel used by internal combustion engines of the Diesel type, which would far outweigh any advantage that could be gained by her coal industry. If that be a correct statement of the conclusions to which Germany has come—the Germany where the Diesel engine was invented and the Germany which sees what the great possibilities are in the development of power from the Diesel engine—I think that we should not be too hasty in saying that we are achieving a great thing in putting 2,000 miners back to work. I am accepting the number of 2,000, but nobody knows exactly how those figures have been arrived at. It obviously a computation of considerable difficulty, but I think that these are the numbers which the Chancellor gave the other day. Would it not be a great deal cheaper and more to the advantage of the country in the long run—I am looking at it as a long-term policy—to say that we regret very much that this change has come, but the country has got to adjust itself to a new condition of things, and we should not be justified in sending 2,000 miners underground to dig coal from which we could obtain power when we could obtain that power equally as good and cheaper and with a great many other advantages from other sources. If the policy is definitely adopted now of bolstering up the coal trade in that way, it needs no argument of mine to tell hon. Members how seriously such a line of policy may handicap our developments in future.

The next reason which the Chancellor gave was that we must preserve some balance in our taxation system. It is rather amusing to notice that the first reason was to weight the balance in favour of coal. The next reason was to preserve the balance of taxation. It is an anomaly, he said, that a particular kind of fuel should be exempt. I would rather say it is an anomaly that any sort of power should be taxed. That is the line along which we should approach this problem, and we should endeavour to take off all the taxes we can from every source of power, and where the taxes have to be imposed they should be kept as low as possible. The revenue coming in is considerably in excess of the amount for which the Chancellor budgeted. He budgeted for £2,000,000, but the revenue in the first year was £2,800,000. Therefore, it must be obvious that, in spite of the extra cost to users more heavy oil is being used because it is the most efficient and most satisfactory power for certain industries. If the balance had really been weighted, as the Chancellor said, in favour of coal, we should have seen a reduction of the imports of oil into the country instead of an increase. The Chancellor of the Exchequer quoted a number of instances of oil users going back to coal when the duty was imposed, but it is obvious from the increase in the revenue from this source that there are a great many other cases where a change-over has not been made and where industries must have started to use heavy oil instead of coal.

I should like to ask why our fishing boats and coastwise steamers are exempt. What reason is there for exempting users of this oil in one industry and not in another? It is clear that the coastwise steamers found the new source of power much more suitable in their competition with foreign vessels, and if they were deprived of this cheap source of power by the imposition of a heavy duty they would be severely handicapped, and perhaps put out of business altogether. In their case the argument was so strong and convincing that the Chancellor gave way. It is not always as easy to put forward such convincing arguments in the case of other industries, but the basis of the argument applies to their case just the same, because it is obvious that if a private person who is not a philanthropist sees that a particular form of power will best serve his interests in business, and then the Government taxes that form of power in the interests of another industry, a severe handicap is put upon him.

After these remarks on the general question, I should like to refer to the new Clause standing in the name of my right hon. Friend the Member for Caithness (Sir A. Sinclair) and myself [Reduction of duty on heavy hydrocarbon oils]. We put down that Clause to draw particular attention to the difficulties which this duty imposes on public utility undertakings. If exemption were granted in their case the loss to the Exchequer would amount to only a comparatively small sum. Many of these statutory undertakings have been started by the Government advancing them money at a cheap rate, and to make the best use of those financial facilities they have installed heavy oil engines, and in those circumstances it is very curious that the Government should then proceed to tax the power they use. With one hand the Government give them cheap financial facilities, and with the other hand taxes them in the interests—because that is the only argument—of coal. I do not know whether hon. Members realise how hardly many of these small undertakings, especi- ally electricity undertakings, have been hit by the duty. I refer in particular to undertakings with only a small area to serve and with limited financial resources. To them an extra £100 or £200 a year on their operating costs is a very serious matter. It means that the advantage of cheaper electricity is being delayed to their consumers. The Government, when assisting those undertakings financially, obviously debit with the idea of giving consumers the advantage of the cheapest supply of electricity possible, and I put it to the Chancellor that it is illogical and unreasonable that these undertakings should be put in the position of not being able to give to their consumers the cheap services which otherwise they might furnish.


Will the hon. Gentleman give us the name of one undertaking which has raised its charges for electricity?


The hon. Member has misunderstood what I said. I was pointing out that owing to the extra cost of running these undertakings, through this duty on the heavy oil they use, they were unable to lower the price of electricity to consumers. Their object is to give as good a service of electricity as possible at the lowest rate, but if the cost of the power they use is increased unnecessarily by this duty it follow, naturally, that they cannot provide so cheap a service. The final argument I will put before the Chancellor is this, and it must apply to all the pleas made to him for exemption whether of heavy or of light oils—that it is in the interests of the country as a whole and of the consumers of power that power should be taxed as little as possible, and that industry should be left free to choose that source of power which it thinks best in its own interests.

7.37 p.m.


I intervene only for a moment, because I find myself impressed a good deal more by the arguments of the Chancellor of the Exchequer than by those of the hon. Member for Orkney and Shetland (Sir R. Hamilton). It seems to me that he has been putting rather the old-fashioned, individualistic point of view. The essential matter we have to consider in putting on duties like this is, as he said, the good of the country as a whole, but I do not think he really worked out what was the good of the country as a whole. This country has certain sources of fuel and it also imports fuel from abroad, and the price at which those fuels are sold has an effect on the standard of life of great masses of our people. We on this side do not believe that we ought to leave these matters to what is called the free play of competition. When the hon. Member for Orkney and Shetland was instancing the case of public utility undertakings I thought he was making an extraordinarily weak case, because, after all, they are not fighting against foreign competition. We believe the whole question of the fuel used in this country ought to be co-ordinated, in the interests of making the most of our home resources and of the work of our own people, holding, as the Chancellor of the Exchequer said, something of a balance, but I do not think that is possible as long as we are living under a system whereby the various producers of fuel are working on a private profit basis.

I think we must go a great deal further in control than can be accomplished by putting on a tax here and a tax there, because that does not effect the purpose. I suggest seriously to Members of the Liberal party that they must think more of the interests of the country as a whole than of the interests of some particular groups of consumers. I agree that by this taxation some consumers may be hit, but we have to consider the balance of advantages, and as this discussion goes on I am regretfully more on the side of the Chancellor than on the side of my hon. Friends below the Gangway; but, then, I have always felt that on these particular matters they do not move sufficiently with the times. We can never tackle the question of the coal trade as a whole apart from considering rival forms of fuel, and to say that we are getting something cheaply can be no answer to what is happening in the coalmining areas. Therefore, I am opposed to this new Clause, because it seems to me to leave out of account the interests of the nation in favour of the purely temporary interest of certain users.

7.43 p.m.


There is a new Clause on the Order Paper which has been included in the scope of this discussion—(Repeal of duty on certain spirits). It stands in the name of my right hon. and gallant Friend the Member for Ripon (Major Hills) and my hon. and gallant Friend the Member for Wycombe (Sir A. Knox). Unfortunately, they are not able to be here, and have asked me to present the case for this Clause. It asks for the repeal of the duty on vegetable turpentine and white spirit, because they are the raw materials of a very considerable industry in this country, the manufacture of paint and varnish. This duty was imposed in 1928 and has been debated regularly in this House since then. In 1931 there was an interesting Debate, in which Members on all sides spoke in favour of the repeal of the duty, and, indeed, I believe the Chancellor of the Exchequer was himself in favour of its repeal, and I would ask him to return to that favourable frame of mind and to listen to this appeal for the removal of the duty. Vegetable turpentine is not suitable for use in internal combustion engines, and consequently, there would be no loss of revenue in that direction if the duty were repealed. The hon. Member for Orkney and Shetland (Sir E. Hamilton) has pointed out the advantage which Germany enjoys in competition with this country in the case of hydrocarbon oils. Manufacturers in Germany who use white spirit are able to purchase it duty free, and that gives them a considerable advantage in competition with articles in this country which involve the use of paint and varnish. White spirit, also, is not suitable for use in petrol engines, because of its low flash point. In view of the fact that these two commodities are the raw materials of an important manufacture in this country I ask the Chancellor of the Exchequer whether he cannot see his way to accept the proposals of my hon. Friends. Any loss of revenue which may occur by reason of the repeal of the tax would be more than compensated for by the increase resulting from the sale of paint and varnish.

7.45 p.m.


I listened with very great interest to the speech of the Leader of the Opposition against the Clause which was moved from his own benches. The other day, a discussion took place when you, Sir, were not in the Chair, upon what constituted an official Amendment, and whether private Members sitting on the benches above the Gangway had the right to have their Amendments regarded as official Amendments. There will be great difficulties for the Chair if private Members above the Gangway are to claim official status for Amendments which are then thrown over by the Leader of their own party.

The Leader of the Opposition asked us to consider this matter from the point of view of the national interest as a whole, and he proceeded to consider it from the point of view of the mining industry which is, of course, a very large and powerful interest in his own party. I would ask the House to consider this from the point of view of the nation as a whole. The Chancellor of the Exchequer has introduced this tax as a prop for the coal industry, but so far as it is an artificial and adventitious help to the coal industry, it must diminish the competitive power of our export industries and reduce their efficiency. I am not arguing that it is necessarily reactionary or retrograde to turn from oil to coal. In many fields of industrial activity steam is well ahead of oil and in others oil is ahead of coal, while in some they are racing neck and neck. Sometimes an improvement in the oil-using prime movers of industry puts oil ahead and then some new invention or development in steam comes along and puts steam ahead.

The right people to judge whether or not it is advisable to turn from oil to coal or from coal to oil are those who are using the fuel. If an industry turns from one to the other on economic grounds, that is in the interest of the country as a whole. In the last year or two industries have turned from oil to coal with distinct advantages to the industry and to the nation as a whole. If an industry turns merely because the Chancellor has artificially made oil dearer, then that must be to the disadvantage of the industry and of the nation. The Chancellor of the Exchequer feels confident that he is the right person to decide—or that this House should do so—whether industries should use oil or coal. He thinks he knows best. In the course of his speech on the last occasion when this matter was under discussion, he represented himself in the somewhat novel guise, for a Chancellor of the Exchequer, of a fairy godmother. He said, philosophically: 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."—[OFFICIAL REPORT, 12th June, 1934; col. 1601, Vol 290.] He went on to describe particularly certain industries having been induced, by the slight weighting of the balance, to look into the question seriously. They found that the difference, instead of being in favour of oil, was in favour of coal. The Chancellor went on to assure us that the Mines Department had had a conversation with representatives of a 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. Finally he reached the culmination by telling us that the director of a firm who had called upon the Chancellor of the Exchequer to demand that he should remove the tax now says that he wishes to thank the Chancellor for putting the tax on as it has meant the saving of fuel costs. When industries have had time to digest that speech, instead of the Chancellor receiving deputations asking for taxes to be removed, he will be receiving deputations asking him to put them on, and we shall see the shares on the Stock Exchange going up, not of those who have had taxes removed but of those who have had the Chancellor's blessing of additional taxation conferred upon them in his Budget.

The Leader of the Opposition feels drawn by the arguments of the Chancellor of the Exchequer. He is quite right. On this point, he is much nearer to the Chancellor of the Exchequer, and they are much nearer to each other than they are to us. If the Chancellor of the Exchequer is to give these strong artificial inducements to industry to use a particular fuel, the Leader of the Opposition feels that the next Chancellor might issue orders telling industry that it is in the interests of the coal industry to use that fuel. That inevitably means nationalisation, because if these great difficulties are being put in the way of industry there will come a time when the leaders of industry will say, "Take industry over from us." We are being led steadily downwards to the nationalisation of industry. I know that hon. Gentlemen above the Gangway do not regard that as calamitous, but most of those who support the Chancellor of the Exchequer would so regard it.

The Chancellor of the Exchequer does not attempt to deny that some industries must burn oil. It seems wrong to penalise them and to add to their burdens by this tax, handicapping them in their competition in world markets. The Chancellor of the Exchequer was very happy about the results of the tax so far, and in the speech from which I have already quoted he read out a long list of industries and institutions which had converted from oil to coal and in which the results, he said, had been very satisfactory. He rather tripped up over hospitals as I had pointed out earlier in the Debate what heavy additional burdens this tax had imposed upon them. Hospitals have indubitably and indisputably suffered from this tax.

It is a remarkable comment on his speech as my hon. Friend the Member for Orkney and Shetland (Sir R. Hamilton) has shown, that the tax has yielded £800,000, or over 40 per cent. more than the Chancellor expected. That shows that industries have continued to use oil, and are paying the tax rather than convert, and it shows what a serious handicap the tax is upon those industries. I have great sympathy with the case that was put for some alleviation of the burden on the aircraft industry. I do not know what answer the Chancellor of the Exchequer would give to that, but, if the relief be at all possible, I join with other hon. Members and urge him to give it. It is in the national interests to give every possible encouragement to aviation at the present time. I wait to hear what he will say. I realise that a very considerable sum of money is at stake, but, if he sees his way to give the relief, I will gladly give him my support.

The new Clause which I have on the Paper—[Reduction of duty on heavy hydrocarbon oils]—is a much more modest one. It merely asks that the tax shall be remitted in the case of public utility undertakings. No one denies that the tax is a burden upon certain industries and is a handicap to trade recovery and an obstacle to employment. For those reasons, as has been pointed out, certain exemptions are provided. The fishing industry is one and coastal steamers are another. My Clause was put down at the suggestion of the Chancellor himself. On the last occasion, when I was speaking against this tax, the Chancellor of the Exchequer interrupted me and said: Has the right hon. Baronet an Amendment down to that effect? that is to say to except electricity undertakings, about which I was speaking at the time and I have now added gas and water undertakings. He said later: 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."—[OFFICIAL REPORT, 12th June, 1934; cols. 1598, 1600 and 1601, Vol. 290.] Now we have put down a Clause which would not mean very much money. The Chancellor of the Exchequer's interruption reminded me that when we were discussing a similar Amendment last year, when this tax was first proposed, an Amendment to exempt the coastal shipping industry, he expressed his willingness to give such remission as seemed to him to be justified by argument, but he drew our attention to the relevant consideration—which seemed to him to be fundamental—that industries which had newly received protection and had freshly benefited from protection duties—and we have never denied that individual industries can obtain advantage from protective duties at the expense of the interests of the nation as a whole—that those industries should not complain of this measure of protection to the coal industry.

The industries to which my new Clause refers derive no benefit from Protection, and the tax is definitely a handicap to their extension and progress. So much is that extension and progress in the public interest that Parliament has passed in recent years a series of measures to that effect. The provision for which our new Clause asks would be at a relatively small cost and would remove a burden from undertakings which obtain no benefit from Protection. It would also remove obstacles to the provision of light and power to industries and to millions of consumers, and would give a stimulus, out of all proportion to the amount of tax, to employment in a wide range of industries.

7.58 p.m.


The Clauses which we are discussing together have this in common, that they all deal with oil; but at the same time they deal with somewhat different aspects of the Oils Duty, some of them being confined to the heavy oils and others touching upon the petrol duty. The observations which I now rise to make deal with each of the Clauses which are the subject of our discussion. May I begin with the one in the name of the hon. Member for Windsor (Mr. A. Somerville)? He recognised that the proposal to exempt white spirit and turpentine from the duty is not a new one. It has been discussed here on a number of occasions, and the proposals have always been rejected. The main reasons for the rejection are that they affect a principle which is of very great importance to the Customs and Excise Department, namely, that you should not begin exempting from a particular duty an article by reason of the use to which that article has to be put. The moment you begin to give a concession upon those lines it is almost impossible to keep the door closed to further concessions, because it is always possible to bring up fresh instances of the way in which the article is being used and fresh reasons why it should be exempt from duty. On this occasion my hon. Friend will no doubt realise that it would conflict with the principle which I laid down for myself in the Budget to grant this concession, which would cost the Exchequer £700,000 if it were confined to the articles which he has mentioned, but which, if it were extended to other industries which could logically claim similar treatment, would probably involve me in a loss of over £2,000,000 a year. I may, however, in expressing my regret to my hon. Friend that I cannot accept his Clause, be able to offer him some consolation by pointing out that the paint manufacturing industry does not seem, at any rate at present, to be suffering very seriously from the fact that it has to pay duty on these oils. The chairman of Messrs. Pinchin, Johnson and Co., at the annual general meeting, remarked to his shareholders: We may congratulate ourselves upon having passed through a difficult transitional period with flying colours. The chairman of another large company, speaking at the annual meeting in April, said that the first three months of 1934 showed an increase in their sales of 15 per cent. over the corresponding period of last year, while their net profits for the same period had increased by 25 per cent. He, therefore, appears to be all right. In the case of another company, the chairman said in May that the shareholders met, not only with a good record as regards the past year's results, but also under conditions and prospects better than for many years. He recorded an improvement in the net profit of no less than 42& per cent. as compared with the previous year. I could quote further illustrations of the general fact that on the whole paint manufacturing companies do not appear to be doing badly.

The first Clause, which would repeal altogether the duty on heavy oils, raises the broad question whether it is right and proper that we should, to use the words quoted by the hon. Member for Orkney and Shetland (Sir R. Hamilton), weight the balance in favour of our own industry as against the imported article. This is really a particular instance of the general question whether Protection is desirable for industry or not. Of course, we know very well that the hon. Member thinks that it is not, and so does the right hon. Baronet the Member for Caithness (Sir A. Sinclair). They are against the protection of home industries, and in favour of allowing everybody to buy foreign articles if they happen to suit them better; they would not even weight the balance in favour of home industries. But I venture to suggest that that is a matter upon which Parliament has already made up its mind and given its verdict, and that to attempt now to go back upon those general principles would be merely beating the air.

The right hon. Baronet the Member for Caithness was kind enough to read to the House part of a speech which I made on the subject of this duty on heavy oils not very long ago. He seemed to read it with almost as much pleasure as if it had been one of his own speeches. I will pursue that practice, and say that it seemed to me to be a very good argument in favour of the course that I was advocating at the time. He said that I had tripped up in regard to hospitals, but even there I am afraid he was not quite correct, because, since I made that speech, there has been brought to my attention the case of a well known hospital, the name of which I shall be very pleased to give him in confidence. Indeed, I do not think there would be any objection to my giving it in public, but as a matter of fact I have not had leave to do so. That hospital, since that time, has had exactly the same experience as the director of the company quoted by the right hon. Baronet. Their attention was drawn, by the imposition of this tax upon fuel oil, to the possibility that they might do better with some product of coal, and they have been able to adopt a system which in the end has actually saved them money.

With regard to the suggestion of the right hon. Baronet that public utility undertakings are being very seriously handicapped by this duty, I really cannot accept that view. The right hon. Baronet himself seemed to be a little inconsistent, because, when he was emphasising the difficulties under which they suffered, he said at the same time that the amount of oil that they used was so small that the loss to the Exchequer would be trifling. To take the case of electricity; only.59 per cent. of the electricity generated in 1932 was due to oil; or, to put it in another way, only 30,000 tons of oil were used in the production of electricity, as against 8,736,000 tons of coal.


I would point out that the undertakings which use oil are very largely small undertakings, dealing with small areas, such as small towns. They are not near to water power, and have not coal handy, and the proportion of such undertakings which use oil is very much higher.


The right hon. Baronet said that they derived no benefit from Protection, but they are not subject to foreign competition, and, therefore, have no need of Protection in the ordinary sense of the word, such as ordinary industries have. Moreover, I do not know if the right hon. Baronet is aware that these very gas and electricity undertakings were some of the strongest petitioners for the imposition of this tax. I have here some observations made by chairmen of gas companies which bear upon this subject. The Governor of the Gas Light and Coke Company said that, although the oil they used had cost them more since they had to bear this tax of 1d. per gallon, it had already brought about an advantage in many directions, particularly as regards the use of coke, and, on weighing up the advantages and the disadvantages, he concluded that the advantages outweighed the disadvantages. The chairman of the Croydon Gas Company said that, while the tax of 1d. per gallon was a burden, it was at the same time an advantage to them when it came to a question of competition between gas and oil for heating purposes. The chairman of another provincial gas and coke company said that this tax on heavy oil had beyond doubt been of assistance to them and it was a noteworthy effort of the Government to assist our own people instead of helping the foreigner. That is the general case in favour of the duty on heavy oils, and I am afraid, therefore, that it is quite impossible for me to consider with sympathy the appeal of the right hon. Gentleman.

I come now to the Clause which I think has received the greatest amount of vocal support this afternoon, namely, the one which proposes to exempt from tax petrol used in aircraft. This again is another instance of an industry claiming exemption from duty for a particular article by reason of the purpose for which it is used, and it is open to exactly the same objection which I have felt obliged to take to the proposal with regard to turpentine and white spirit. I listened very carefully to all the arguments of my hon. Friends who have spoken in favour of the proposal, but they seemed to me to be based, at any rate in some directions, upon misunderstanding. My hon. Friend the Member for Melton (Mr. Everard) put the case very persuasively. He said that motors had received a concession in the reduction of the Horse-power Tax, but no similar concession had been given in respect of aircraft. Of course, the answer is very obvious. It would not be possible to give a similar concession with regard to aircraft, because there is no tax upon the horse-power of aircraft. It seems to be rather a curious idea that, where one article is taxed and some concession is made, that should be made the ground for demanding that the same advantage should be given to some other kind of article which is not subject, in the first instance, to any such tax.


What I meant, of course—I am sorry if I did not make myself clear—was that the motor owner had received some rebate on the cost of running his machine, and the Chancellor of the Exchequer has made it, not by reducing the tax on petrol, but by reducing the Horse-power Tax. This has made it cheaper for the motorist to run his machine, but nothing has been done to reduce the cost of running aircraft.


That argument might be used in the case of every other kind of machine in the country. I cannot see any reason why aircraft, in particular, rather than the user of any other kind of apparatus or machinery, should claim an advantage because an advantage has been given to the motor car owner. I wonder that my hon. Friend the Member for Melton did not make use of an argument—or perhaps I should say a fallacy—which was apparent in the speeches of several other hon. Members, who were evidently under the impression that the tax which the motor owner pays upon his petrol is used to finance the maintenance and construction of roads. That is an entire misapprehension. It is not used for anything of the kind. The Petrol Tax is a general revenue tax, and the finance of the Road Fund comes entirely out of the Motor Vehicle Licence Duties. Therefore, it is an entire misapprehension to base any argument for the special consideration of aircraft on the ground that they have no roads to keep up and do not derive an advantage similar to that which the motor owner is alleged to get.

Only one of the arguments used on this subject seemed to me to be susceptible of any serious consideration. That was the argument that it was to what I might call the military advantage of this country to encourage aviation among the civilian population, because it would give us a reserve of pilots and of machines—perhaps more especially of pilots—to operate in what was rather euphemistically called an emergency, machines of a more destructive character. If it is to be a question of the safety or security of the country, then, indeed, there may be something to be said for that argument, I am not saying whether there is or not, but if it should be thought desirable that, for the sake of the security of the country, we should give some artificial stimulus or encouragement to the industry of aeroplane engine making and to the practice of flying by the civilian population, I would much prefer to see that done by a subsidy given for the purpose stated, so that everyone might know what it was for, rather than by a method of this kind which probably could not be anything like so efficient, because, in spite of what has been said, it could not make a very great difference to the aeroplane engine industry. It could be done in a way far more efficient and could be directed exactly where it is wanted to be directed. To give this exemption is rather a blind sort of proposal. I doubt very much whether it is the most effective way of effecting the purpose that hon. Members have in their minds, and I suggest to thorn that, if a really serious argument in favour of doing something more for the aviation industry and for flying in general is intended, it is desirable in the interests of the defence of the country that they should apply to the Air Ministry and put their arguments to them and, if the Department think they have made out a good case, they could put to the Government what is their view about the desirability of subsidising the industry in one form or another.

8.16 p.m.


It would appear that hon. Members opposite prefer to fight for their political principles rather than for the salvation and the advancement of one of the greatest basic industries of the country. The right hon. Baronet the Member for Caithness (Sir A. Sinclair) has spoken about the use of oil in public utility undertakings. The Chancellor of the Exchequer, quite lightly, said that the amount of heavy oil used in these utility undertakings is very negligible indeed, and the reason is not far to seek. The cost of firing boilers in a public utility station is far less with the use of coal than with the use of oil. In a pound of oil there are 19,000 British thermal units and in a pound of good Welsh coal there are 12,000 British thermal units, but the price of oil is £3 10s. a ton while the price of coal ranges from 7s. 6d. to 15s. Therefore, on a heat basis, oil is from 50 to 75 per cent. dearer than coal. There was a great deal of ignorance on the part of the executives of many buildings in London. They formerly used oil and they thought this tax would be a heavy blow. Some of them saw me and asked if I would represent their case to the Government. They thought it would cost them at least £l,000 a year if they had to revert to coal, but the precise opposite has taken place. Some large buildings have taken out their oil firing apparatus and adopted up-to-date firing, and one vast building in London is saving £l,000 a year by using coal, which is the fuel of the country and the raising of which gives a great deal of employment to our miners and to the derelict areas where some of these public utility concerns are operating. The hospitals, too, formerly used oil because among the members of the committees there was no one who had any technical knowledge. Many hospital committees do not know that they can increase the efficiency of their boilers and at the same time reduce their costs.

There is no industry, so far as I know, with one possible exception, in which coal fired scientifically does not give far better effects than oil can ever do. I know a steel firm which used oil firing to heat their ingots. The sulphur content of the oil interfered with the quality of the steel produced. They got a quick heat, but when they turned over to powdered coal, they got a lambent heat which was far better than oil firing, and they would not go back to oil if you offered it to them at anything like the same price per B.T.U. In power stations and smelting works as well as in other industries, many employers do not take sufficient interest in what happens in the boiler room or furnaces. They leave the matter of firing to the engineers. When this tax was put on, they were forced to go into the cost of firing, and to their amazement they found that coal was far cheaper and far better than they thought was the case. Hon. Members opposite must make up their minds whether it is their policy still to stand for the great battle flag of Free Trade which flew over the great victories of the Liberal party in the past. Their ideas may have been true then, but they were only true for that time. I hope the Chancellor of the Exchequer will stand by his guns. Coal is not dead. Old King Coal still lives. Modern technical experience clearly proves that coal fired scientifically under boilers, or for the smelting of iron, or annealing billets is a cheaper proposition than oil. I hope it will not be very long before the Admiralty sets an example to the country.

Mr. DEPUTY-SPEAKER (Captain Bourne)

There is nothing in the Clause that can possibly affect the Admiralty.


I was trying to show that oil firing is the method now used in the Navy, and it seemed to me to be quite relevant to the Debate.


This could in no circumstances affect the Admiralty, and the hon. and gallant Gentleman must confine himself to the Clause before the House.


I was thinking of the example that could be set by responsible authorities who are great consumers of oil. By research and experiment in colloidal fuel or in the use of pulverised fuel their example might enable coal to supplant oil altogether wherever steam-raising is used. Therefore, it seemed to me that, if we could get Government Departments burning coal exclusively, if the Government were to use propaganda—


I must remind the hon. and gallant Gentleman that we are not having a full dress Debate on oil and coal. He must keep to the new Clause.


I hope that the Government will stand by this tax, and that in future the Liberal party will look at the technical side of the case as well as the political side, and assist in bringing renewed prosperity to a great industry in which every Member of the House is vitally concerned.

8.26 p.m.


The Debate has been an apt illustration of the old saying that in a multitude of counsellors there is wisdom, for there is no doubt that there has been a great concensus of opinion as to the possibility of the Chancellor of the Excheuqer making a concession on this tax. I would emphasise the fact that this is an industry to which surely a small concession might have been given. I presume that this is one of the cases where it may be said literally that the Chancellor of the Exchequer's feeling has been torn between love and duty, and duty has won. There is one aspect of the question which has not been touched upon, and that is in regard to the carriage of luggage by aeroplane. The consumption of an aeroplane is about a gallon a mile, which makes it almost impossible for any long distance to be travelled without having one's luggage cut down to such a small amount that it is hardly worth while going. I would instance the cost of bringing a typewriter from Karachi to this country. The charge is £4 10s. on that alone, a clear instance of the need for cheapening the cost of the running of aeroplanes. That is the point which I would impress upon the Chancellor of the Exchequer when the matter comes up for reconsideration.

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

The House divided: Ayes, 25; Noes, 211.

Division No. 292.] AYES. [8.28 p.m.
Acland, Rt. Hon. Sir Francis Dyke Janner, Barnett Thorne, William James
Banfield, John William Llewellyn-Jones, Frederick Wedgwood, Rt. Hon. Josiah
Buchanan, George McEntee, Valentine L. White, Henry Graham
Cocks, Frederick Seymour Mallalieu, Edward Lanceiot Wilmot, John
Evans, David Owen (Cardigan) Mason, David M. (Edinburgh, E.) Young, Ernest J. (Middlesbrough, E.)
Foot, Dingle (Dundee) Milner, Major James
Gardner, Benjamin Walter Owen, Major Goronwy TELLERS FOR THE AYES.—
George, Megan A. Lloyd (Anglesea) Salter, Dr. Alfred Mr. Walter Rea and Sir Robert Hamilton.
Griffith, F. Kingsley (Middlesbro', W.) Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Harris, Sir Percy Strickland, Captain W. F.
Acland-Troyte, Lieut.-Colonel Bowater, Col. Sir T. Vansittart Carver, Major William H.
Adams, Samuel Vyvyan T. (Leeds, W.) Bowyer, Capt. Sir George E. W. Cazalet, Thelma (Islington, E.)
Albery, Irving James Braithwaite, J. G. (Hillsborough) Chamberlain, Rt. Hon. N. (Edgbaston)
Allen, Lt.-Col. J. Sandeman (B'k'nh'd.) Brass, Captain Sir William Clarry, Reginald George
Amery, Rt. Hon. Leopold C. M. S. Broadbent, Colonel John Cobb, Sir Cyril
Applin, Lieut.-Col. Reginald V. K. Brown, C. W. E. (Notts., Mansfield) Cochrane, Commander Hon. A. D.
Aske, Sir Robert William Brown, Col. D. C. (N'th't'd, Hexham) Colfox, Major William Philip
Baldwin, Rt. Hon. Stanley Brown, Ernest (Leith) Cook, Thomas A.
Balfour, Capt. Harold (I. of Thanet) Brown, Brig.-Gen. H. C. (Berks, Newb'y) Cooper, A. Duff
Banks, Sir Reginald Mitchell Browne, Captain A. C. Copeland, Ida
Barclay-Harvey, C. M. Buchan-Hepburn, P. G. T Courtauld, Major John Sewell
Barrie, Sir Charles Coupar Burghley, Lord Courthope, Colonel Sir George L.
Barton, Capt. Basil Kelsey Burnett, John George Cranborne, Viscount
Batey, Joseph Campbell, Sir Edward Taswell (Brmly) Craven-Ellis, William
Blinded, James Campbell-Johnston, Malcolm Croft, Brigadier-General Sir H.
Boulton, W. W. Caporn, Arthur Cecil Crooke, J. Smedley
Crookshank, Col. C. de Windt (Bootle) Law, Richard K. (Hull, S. W.) Rickards, George William
Crookshank, Capt. H. C. (Gainsb'ro) Leckie, J. A. Robinson, John Roland
Croom-Johnson, R. P. Leech, Dr. J. W. Rosbotham, Sir Thomas
Cruddas, Lieut.-Colonel Bernard Lennox-Boyd, A. T. Ross Taylor, Waiter (Woodbridge)
Daggar, George Lewis, Oswald Runge, Norah Cecil
Davies, David L. (Pontypridd) Lindsay, Noel Ker Russell, R. J. (Eddisbury)
Davies, Maj. Geo. F. (Somerset, Yeovil) Lister, Rt. Hon. Sir Philip Cunliffe- Rutherford, Sir John Hugo (Liverp'l)
Denman, Hon. R D. Llewellin, Major John J. Salt, Edward W.
Dixon, Rt. Hon. Herbert Loder, Captain J. de Vere Sandeman, Sir A. N. Stewart
Dobbie, William Loftus, Pierce C. Sanderson, Sir Frank Barnard
Drewe, Cedric Logan, David Gilbert Savery, Samuel Servington
Duncan, James A. L. (Kensington, N.) Lovat-Fraser, James Alexander Selley, Harry R.
Dunglass, Lord MacAndrew, Lieut.-Col. C. G. (Partick) Shaw, Helen B. (Lanark, Bothwell)
Edmondson, Major Sir James MacAndrew, Capt. J. O. (Ayr) Simmonds, Oliver Edwin
Edwards, Charles MacDonald, Malcolm (Bassetlaw) Smiles, Lieut.-Col. Sir Walter D.
Eimley, Viscount McKie, John Hamilton Smith, Bracewell (Dulwich)
Emrys-Evans, P. V. McLean, Major Sir Alan Smith, Sir J. Walker- (Barrow-in-F.)
Essenhigh, Reginald Clare McLean, Dr. W. H. (Tradeston) Smithers, Sir Waldron
Everard, W. Lindsay Maitland, Adam Somervell, Sir Donald
Fleming, Edward Lascelles Makins, Brigadier-General Ernest Somerville, Annesley A. (Windsor)
Fremantle, Sir Francis Manningham-Buller, Lt.-Col. Sir M. Somerville, D. G. (Willesden, East)
Fuller, Captain A. G. Margesson, Capt. Rt. Hon. H. D. R. Southby, Commander Archibald R. J.
Gillett, Sir George Masterman Mason, Col. Glyn K. (Croydon, N.) Spencer, Captain Richard A.
Gilmour, Lt.-Col. Rt. Hon. Sir John Mayhew, Lieut.-Colonel John Spens, William Patrick
Gluckstein, Louis Halle Mitchell, Harold P. (Br'tf'd & Chisw'k) Stanley, Rt. Hon. Lord (Fylde)
Goff, Sir Park Mitchell, Sir W. Lane (Streatham) Stanley, Hon. O. F. G. (Westmorland)
Graham, Sir F. Fergus (C'mb'rl'd, N.) Molson, A. Hugh Elsdale Stewart, J. H. (Fife, E.)
Grenfell, Edward C. (City of London) Monsell, Rt. Hon. Sir B. Eyres Stones, James
Grimston, R. V. Morris, Owen Temple (Cardin, E.) Strauss, Edward A.
Groves, Thomas E. Morrison, G. A. (Scottish Univer'ties) Sugden, Sir Wilfrid Hart
Guinness, Thomas L. E. B. Moss, Captain H. J. Sutcliffe, Harold
Gunston, Captain D. W. Muirhead, Lieut.-Colonel A. J. Tate, Mavis Constance
Hannon, Patrick Joseph Henry Munro, Patrick Thomson, Sir Frederick Charles
Haslam, Henry (Horncastle) Nail, Sir Joseph Thorp, Linton Theodore
Haslam, Sir John (Bolton) Nation, Brigadier-General J. J. H. Tinker, John Joseph
Headlam, Lieut.-Col. Cuthbert M. Nicholson, Godfrey (Morpeth) Touche, Gordon Cosmo
Hellgers, Captain F. F. A. O'Donovan, Dr. William James Train, John
Hepworth, Joseph Ormsby-Gore, Rt. Hon. William G. A. Tufnell, Lieut.-Commander R. L.
Hopkinson, Austin Pearson, William G. Wallace, John (Dunfermline)
Hore-Belisha, Leslie Peat, Charles U. Warrender, Sir Victor A. G.
Hornby, Frank Penny, Sir George Wayland, Sir William A.
Horsbrugh, Florence Petherick, M. Wedderburn, Henry James Scrymgeour-
Hudson, Capt. A. U. M. (Hackney, N.) Potter, John Whyte, Jardine Bell
Hume, Sir George Hopwood Powell, Lieut.-Col. Evelyn G. H. Williams, David (Swansea, East)
Hunter, Capt. M. J. (Brigg) Procter, Major Henry Adam Williams, Edward John (Ogmore)
Inskip, Rt. Hon. Sir Thomas W. H. Pybus, Sir Percy John Williams, Herbert G. (Croydon, S.)
James, Wing-Com. A. W. H. Raikes, Henry V. A. M. Williams, Dr. John H. (Llanelly)
Jenkins, Sir William Ramsay, T. B. W. (Western Isles) Windsor-Clive, Lieut.-Colonel George
Joel, Dudley J. Barnato Ramsden, Sir Eugene Winterton, Rt. Hon. Earl
John, William Rankin, Robert Withers, Sir John James
Jones, Sir G. W. H. (Stoke New'gton) Rawson, Sir Cooper Worthington, Dr. John V.
Ker, J. Campbell Reed, Arthur C. (Exeter)
Kerr, Hamilton W. Reid, David D. (County Down) TELLERS FOR THE NOES.—
Lamb, Sir Joseph Quinton Reid, William Allan (Derby) Lieut.-Colonel Sir A. Lambert
Latham, Sir Herbert Paul Remer, John R. Ward and Dr. Morris-Jones.
Law, Sir Alfred Renwick, Major Gustav A.