HC Deb 28 June 1939 vol 349 cc543-51

(1) In paragraph 4 of the Second Schedule to the Finance Act, 1920 (which, as amended by the Seventh Schedule to the Finance Act, 933, prescribes the rate of duty payable under Section thirteen of the Finance Act, 1920, in respect of the mechanically propelled vehicles therein mentioned), for sub-paragraph (a) there shall be substituted the following sub-paragraph.—

  1. (a) locomotive ploughing engines, tractors, agricultural tractors and other agricultural engines, which are not used on roads for hauling any objects except as follows, that is to say.—
    1. (i) for hauling their own necessary gear, threshing appliances, farming implements, or supplies of water or fuel required for the purposes of the vehicle or for agricultural purposes;
    2. (ii) for hauling from one part of a farm in the occupation of the person in whose name the vehicle is registered under the Roads Act, 1920, to another part of that farm, agricultural produce of, or articles required for the farm.… 5s. od.

(2) In Sub-section (7) of Section two of the Finance Act, 1935 (which excepts from the provisions of that Section withdrawing the rebate on heavy oils used as fuel for mechanically-propelled vehicles, the vehicles specified in sub-paragraphs (a), (b) or (c) of the said paragraph (4), the reference to the said sub-paragraph (a) shall be construed as a reference to the sub-paragraph substituted there for by this Section—[Captain Wallace.]

Brought up, and read the First time.

9.53 p.m.

The Minister of Transport (Captain Wallace)

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

Hon Members will be glad to hear that we start the new Clauses with a concession by the Chancellor of the Exchequer. The object of this new Clause is to allow farmers greater freedom in the use to which tractors chargeable to duty at the nominal rate of 5s. can be put. At the present time agricultural tractors, if they are to qualify for the 5s. rate, can be used on public roads only for the haulage of their own necessary gear, threshing appliances, farming implements and the like. Farmers who own tractors are an increasing number. They use tractors to-day for work which was previously done by horses, and they are bound at present by the restrictions applicable to the 5s. class, but the concession made in the new Clause provides in effect that tractors taxed at 5s. may now also be used for the haulage of farm produce and farming requisites, such as manure and feeding stuffs, on public roads between different parts of the same farm. It is a concession which will be specially valuable to the farming community at harvest and other busy times.

I am somewhat surprised at the hilarity of hon. Members opposite at any concession which is made to the hard-hit farming industry. Sub-section (2) of the new Clause clarifies the position with regard to the exemption of the oil fuels used for these vehicles from the 9d. tax on oil. Section (2), Sub-section (7) of the Finance Act, 1935, allows a rebate of 8d. in the 9d. tax on oil for oils used in these particular agricultural machines. Sub-section (2) of this new Clause is designed to make it quite clear that the fuel used for the propulsion of the vehicles coming within this revised classification will still be subject to the lower rate. I hope that with this explanation the Committee will agree to the new Clause.

Mr. Bevan

I gather that these vehicles would not be used by farmers during the whole year, but only at certain times. Would farmers be able to sub-let or to hire out these vehicles to other persons who would use them for ordinary road purposes, and in that case, would the vehicles be exempted?

9.56 p.m.

Mr. Alexander

I had intended to say something on the point that has been raised by my hon. Friend, but before doing so, I should like to comment upon this generosity of the Government, which seems to be in contemplation of the early approach of the General Election. [Interruption.] I think the number of concessions and grants which the Government have been making during the last few months to their great standby, the rural constituencies, have made that fairly plain. From the way in which they have been pouring out money in this direction, I think it is fairly patent what their political views on the subject are. As to the point raised by my hon. Friend the Member for Ebbw Vale (Mr. Bevan), I think it is well known, as indeed it was explained by the Minister of Agriculture when he was introducing his proposals concerning tractors recently, that a large proportion of the tractor work done on farms is not done by vehicles owned by the farmers, but by hired vehicles. Those who have an interest in rural districts as a result of residence there from time to time, and who watch what happens there, know that a very large part of this work is done by regular agricultural tractor people, who hire out the vehicles and keep gangs of men to send round with them. It is obvious that this type of vehicle will do a good deal of travelling on the roads from farm to farm when they are not engaged in hauling farm implements from different parts of the farm itself. I should be interested to know exactly how the officials responsible for the collection of the horse-power tax in connection with such vehicles will distinguish between the various periods during which the tractors are in use, when they are travelling on hire between the farms, and when they are working on the farms. I think it will be very difficult to avoid the complete misuse of the concession that is being made, unless the Minister of Transport can devise some machinery that will effectively prevent such misuse. We have had no explanation on this matter from the Minister of Transport, and I feel that we ought to have one before we grant him the new Clause.

9.59 p.m.

Mr. Turton

There are one or two drafting points that I want to put to the Minister of Transport. Under the Finance Act, 1936, a concession was made in respect of agricultural vehicles if they were being used to pass from one piece of land in the occupation of a farmer to another piece of land in his occupation, and if the distance did not exceed in the aggregate six miles in any calendar week they were exempted from all duty. I want to ask my right hon. and gallant Friend whether the effect of this new Clause will be subject to that provision in the Finance Act, 1936, or whether it will take away the exemption from liability to the horse-power tax in that case. A great many fanners do not use tractors for the purposes of going on the road, and therefore, they ought not really to come within the road duty at all.

Valuable as the concession given in the new Clause will be, I rather fear that its value will be largely diminished by the fact that the word "farm" is used. Many farmers have two adjacent farms which they have to farm in order to make farming remunerative. I have often heard the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) say that the unit of the farm is too small, and I gather that the Co-operative Society believe in having larger farms and for that purpose take in more than one farm. For these reasons, I think it would be more helpful if a term such as "land in the occupation of a single occupier" could be used. If the new Clause were limited merely to "farm," it would mean that directly a farmer brought a tractor from one farm in his occupation to another farm in his occupation for the purpose of doing some ploughing, he would have to pay a higher rate of duty. These are drafting points, but I should be grateful if my right hon. and gallant Friend would look into them either now or between now and the Report stage, and see whether this Clause fits in with Section 12 of the Finance Act, 1936.

10.2 p.m.

Sir P. Harris

Yesterday we spent many desperate hours in struggling to get concessions with regard to motor cars used for commercial and other purposes, and the right hon. Gentleman the Chancellor of the Exchequer firmly resisted. I am glad that on this occasion, unlike yesterday, we have present the Minister of Transport. If he had been here yesterday, we might have been more successful in our efforts. [Interruption.] In any case, he did not take an active part in the proceedings, but kept modestly in the background. We are grateful for the concession that is now being given, because it establishes the sound principle that this tax is a tax on industry and on transport in one form and another. We do not intend to oppose this concession. It will help agriculture, and it is sound in principle; and it is a principle that could well be extended to other industries. I should like to ask what will be the cost of it. Yesterday, the Chancellor of the Exchequer was telling us that certain concessions would involve enormous sums. I should like to know whether a large sum is involved in this concession, and whether it represents a large financial contribution to agriculture. In the meantime, in principle we approve of this common-sense proposal. 10.4 p.m.

Sir Joseph Lamb

I should like to say how much I appreciate the concession given in the new Clause. In reply to the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris), the concession will not cost anything. It is really a clarification of the conditions under which these tractors can be used in the cultivation of land. Agriculture, like other industries, is now becoming much more mechanised than it was on the old days, and the use of horses, much as we may regret it for certain reasons, is being supplanted by the use of mechanised power. Up to now there has been a great deal of uncertainty as to how much a tractor which pays this tax of 5s. can be used upon the roads in the actual work of completing the cultivation of the farm. That is to say, although it is not on the road when it is actually cultivating the land, it has to be transported from one field to another on the same farm, and of course there are certain crops and manures which have to be transported from one part of the farm to another. It has not been clear how much of this could be done with the tractor, but this new Clause has clarified the position and, much as I believe it will gratify some people, it will cost nothing while being of great value to agriculture.

10.6 p.m.

Captain Wallace

In answer to my hon. Friend the Member for Thirsk and Malton (Mr. Turton), the concession of the 1936 Act was granted to all classes of vehicles, and this Clause does not affect that in any way. As far as the wording of the Clause is concerned, it has been fully considered by the Minister of Agriculture and also by the National Farmers' Union. If any evidence is brought before me that the wording is not such as to carry out the intentions that the Chancellor of the Exchequer has in mind, I will certainly look into it before another stage. The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) was answered by my hon. Friend behind me. The effect of the concession on the Revenue will be negligible. It is a concession in the direction of extending the ways in which these vehicles can be used. The right hon. Gentleman the Member for Hillsborough (Mr. Alexander) discussed the question of tractors being hired out to other people. The best answer is to remind him that the principle by which the taxation of these tractors is governed is the use to which they are put and, if any particular tractor comes to be used in a different way which is not appropriate to the class in which it is registered, it will come into a higher class of taxation.

There are four classes into which these machines can fall. There are tractors which do not go on any road at all. They do not pay anything and do not have a licence. Secondly, there is the class of tractors which do not exceed six miles on the public roads per week. They do not pay tax either. There is the 5s. class of tractors, which under the existing law are allowed to haul only their own gear and farm implements if used on public roads, and fourthly there are the agricultural tractors which come under paragraph 4 (d) of the Schedule; they pay £12 if they are not over five tons in weight unladen, and if exceeding five tons and not exceeding ten, £20. Over 10 tons they pay £20 for the first 10 tons and £2 a ton after that. If in any case a tractor is taken out of the use for which it pays a lower rate, it will immediately become liable to a higher rate of duty.

10.10 p.m.

Mr. Bevan

How do you know that? The hon. Gentleman cannot get away with that. One of these tractors has been registered for use on the farm, but its use on the farm is limited to a certain time of the year and it is lucrative for the farmer, not being able to make use of it all the year round, to let it out to certain people for use during other parts of the year, although it is still registered in the name of the person who bought it. The other man may use it for any purpose whatever. The tractor still remains in its original classification. The hon. Gentleman is too optimistic if he imagines that, immediately a farmer hires it out for general purposes, he goes to the local taxation department and offers to pay the higher tax. He does no such thing. There would need to be inspectors like blackberries in the autumn to check the practice. You can drive a tractor through the Clause. With regard to the point raised by the hon. Member for Thirsk and Malton (Mr. Turton), surely the governing words are "from one part of the farm in the occupation of the person." That is not a particular farm. If he had three or four farms he could transport the tractor from one to the other.

Mr. Turton

The Clause says "hauling from one part of the farm to another part of that farm."

Mr. Bevan

The operative words surely are that the farms are in the occupation of that person. It seems to me fantastic that the National Farmers' Union, with the resources of the Parliamentary draftsmen, have drafted a Clause which, if it is read in the way the hon. Member suggests, denies this advantage to a large proportion of the agricultural community, if indeed there is any advantage in it at all. I think a word ought to be said about the practice of consulting interests outside before things are done in this House. It is growing. Over and over again we have admissions from the Front Bench that, before Parliament is informed of certain concessions, consultations take place and interested groups of people, interested property owners of various kinds, are allowed to have their influence upon the drafting of a resolution. If we are to have this sort of consultation with all kinds of property interests outside, it seems to me that the time has arrived for the trade unions to begin to demand that they shall be taken into consultation.

Sir J. Lamb

Is there any difference between a trade union and the Farmers'Union?

Mr. Bevan

The difference is perfectly clear to the hon. Member. The fanners are represented on that side of the House and the unions on this. But the practice is growing. We had it over the Coal Bill. The coal owners were consulted time after time and the farmers are consulted now. This is merely shovelling out public money after consultation with the recipients. The hon. Gentleman started off by saying, "a concession has been made." If no concession is being made, there is no relief, and what is the point of it? The hon. Gentleman cannot say what it costs.

Sir J. Lamb

I said it did not cost anything.

Mr. Bevan

How do you know? The Minister did not say that.

Sir J. Lamb

I know because it is a fact which the Minister has corroborated. If Members had listened they would know it was corroborated by the Minister.

10.15 p.m.

Mr. Bevan

The hon. Gentleman heard the Minister say that the cost would be negligible, so that some public money is involved. We do not know how much this will cost. The Minister himself would find it difficult to say. He, at the moment, does not know the number of vehicles to which this concession applies. What I am trying to point out is that a large number of vehicles will be sneaked out of one class into another, and the higher classifications will be lost to the general taxation of the country. We are, in fact relieving a certain class of taxpayers, at the expense of the national revenue, and we are doing so after consultation with the recipients of the relief, before it has been considered in the House of Commons. I think the time has come for a protest against this method of conducting public finance. If hon. Members wish to state a case for their constituents they should state that case in the House of Commons and not sneak round the corridors of Government Departments, to get a concession before the House of Commons has discussed the matter at all.

Mr. Benson

I think the hon. Member for Ebbw Vale (Mr. Bevan) is extremely unreasonable. Farmers do not pay Income Tax. They do not pay rates. Why should they pay motor tax?

Captain Heilgers

I would like to relieve the anxiety of the hon. Member for Ebbw Vale (Mr. Bevan) by assuring him that not all farmers will be placed in the position which he has described. In my own case, as far as I can make out, the result of the new Clause will be that in future I shall pay 10s. for my two tractors. Previously I had to pay nothing at all.

Clause read a Second time, and added to the Bill.