HC Deb 08 April 1948 vol 449 cc366-74
The Minister of Fuel and Power (Mr. Gaitskell)

With permission I will now make a statement on petrol rationing. Since the withdrawal of the basic ration and the other restrictions imposed last autumn, substantial savings in petrol consumption—and therefore in dollar expenditure—have been achieved. These savings, I estimate, amounted in total, up to the end of March, to 430,000 tons which would have cost 18½ million dollars. And each week now the level of consumption is about 21,000 tons less than it would have been if no cuts had been imposed—representing at present prices an annual saving of about 50 million dollars.

As the Chancellor of the Exchequer has emphasised, the need to hold down dollar expenditure today is just as great as it was last autumn. The European Recovery Programme has saved us from the immediate prospect of further drastic and damaging cuts in our dollar imports of food and materials, including oil, but it does not permit us to increase such imports above their current levels. Nor must we forget that the increasing demand for oil—particularly in the United States, which absorbs two-thirds of the world output—combined with a lack of tankers and refinery capacity, will almost certainly give rise, for some years, to an acute world shortage of petroleum, and that this may have repercussions on the supplies which we ourselves can obtain.

In these circumstances the Government have decided that we cannot possibly afford to give up the valuable economies achieved as a result of the measures adopted last autumn. Any changes in the present rationing arrangements must therefore be subject to the condition that they do not involve an increase in total petrol consumption. At the same time the Government fully recognise that the present arrangements are in many respects unsatisfactory. The question therefore arises: can they be altered so as to give greater satisfaction without an increase in petrol consumption?

The first and most formidable obstacle to any improvement is the existence of the black market. There can be no doubt that only the complete withdrawal of the basic ration with all its tiresome consequences, could have achieved economies on the necessary scale—so long as the black market existed. For a mere reduction in the basic ration would have only intensified the demand for black market petrol and the scale of illicit transactions. And equally, so long as such transactions are possible, the restoration of a small basic ration would certainly be accompanied by heavy losses through the black market and a consequent increase in petrol consumption. Finally, although the withdrawal of the basic ration diminished the importance of the black market, there is reason to believe that the leakage of petrol through this source still remains substantial.

In order to find some solution to this problem I appointed a Committee last January under the Chairmanship of Mr. Russell Vick, K.C., to investigate its causes and to suggest remedies. Their report was published last night and hon. Members will be aware of its findings. I should like to express my sincere thanks to the Committee who have done their work with great vigour and speed and, I believe, have found an effective solution to this most difficult problem. I would also like to thank the organisations and persons who have assisted them.

The Government have decided to accept in the main the proposals of the Committee, including the passing of special legislation on penalties for those who engage in the black market. A Bill giving effect to this is already being drafted and I hope we shall have the support of all sides of the House in secur- ing its speedy passage. I must make it plain that the Government regard this Bill as essential to the further changes which I am about to describe, and that the latter cannot be put in to effect until the Bill becomes law. If the Vick Committee proposals succeed—as I am confident they will with the backing of strong public opinion—then I believe we can count on saving up to perhaps 100,000 tons of petrol a year which is probably still being transferred illicitly through the black market.

My Department has for some time also been engaged in examining the system of supplementary allowances with a view to saving petrol and simplifying administration in this we have had the assistance and advice of Mr. W. B. Reddaway of Clare College, Cambridge, who has exceptional experience in dealing with rationing problems in the Board of Trade. The task here is a formidable one and we have not by any means completed it. But I think we may reasonably count on saving at least 20,000 tons a year by cuts in certain allowances.

Representatives of the Joint Committee of the Automobile Association, the Royal Automobile Club and the Royal Scottish Automobile Club are already collaborating with us in this review, and I propose to appoint a standing advisory committee, whose functions would be to advise on any measures to simplify and improve the rationing system which may be put forward, and to supervise the carrying out of measures to suppress the black market. Accordingly, I have asked Mr. Russell Vick to be chairman of the Committee and his two colleagues Mr. Parker and Chief Detective Inspector Chapman to be members. I have also invited Mr. Gibson and Captain Phillips the joint secretaries of the Committee of Motoring Organisations, Mr. Grafton of the Motor Agents' Association and Mr. Reddaway to serve on the Committee.

In all, then, I hope by suppressing the black market and by the cuts in supplementary allowances to save 120,000 tons of petrol a year. This is all the extra petrol we have to distribute if total consumption is not to rise. Distributed as a basic ration of the old type, this, would allow only some 30 miles a month per car. It would be of some advantage to those already receiving supplementary allowances but of little or no value—and therefore quite unfair—to those with motor vehicles laid up. We have therefore decided instead on a different plan under which nearly all the extra petrol saved goes to those who none now. The new arrangements will be as follows:—

  1. (1) Anybody who licenses a private car or motor cycle will be entitled to a small all-purpose petrol allowance to be used entirely as the owner wishes. This will be at the rate of ⅓ of the old basic ration and so will be sufficient for only about go miles motoring per month, as compared with 270 miles per month provided through the basic ration immediately before it was withdrawn.
  2. (2) In contrast to the old basic ration this allowance will not be additional to the existing supplementary allowances. To avoid confusion I therefore propose to call it a "standard" ration. A reduction equivalent to the new standard ration will be made from all supplementary allowances as they are issued. Thus those now receiving supplementary petrol equal to or exceeding the "standard" ration will receive in total no more petrol coupons than before; and I must make it plain that no appeals against the application of this rule in individual cases can be considered. I realise, of course, that this will seem rather hard to some, but we just cannot at present afford the dollar expenditure which would be necessary to give everybody the standard ration in addition to their existing supplementary allowances, and this is the decisive factor. Holders of supplementary allowances will of course be entitled to use their "standard" ration quite freely and without restriction.
  3. (3) The standard ration will be valid for the month of issue and the succeeding five months so that those who wish to do so may accumulate their coupons for as much as six months. Moreover, during the first six months of the new system, coupons valid during the period may also be used in advance.
  4. (4) Motorists who do not draw supplementary allowances will be entitled to obtain a motor vehicle licence for their car or motor cycle at half the normal rate. My right hon. and learned Friend the Chancellor of the Exchequer will be tabling later in the day the 370 necessary Resolution on this matter. I also propose to discuss at once with representatives of the insurance companies the question of a reduction in premiums being granted in similar cases.
  5. (5) Arrangements will be made for an issue of petrol for private motor boats and aircraft at one-third of the rate in force immediately before the withdrawal of the basic ration.
  6. (6) As a corollary of these changes, I propose to revoke the order restricting the operation of hire cars to a radius of 20 miles from the place in which they are normally kept.
These changes will come into effect on 1st June, which is the earliest possible date by which the operations against the black market can be fully effective.

I do not expect for one moment that these arrangements will satisfy everyone, but I claim that, given the condition that we cannot afford more dollars for petrol, they have great advantages. Those who have been obliged to lay up their cars or motor cycles may bring them out again without excessive cost for a modest mileage, which they may concentrate or spread in time as they wish. Those with supplementary allowances, who have enjoyed no little benefit and convenience from keeping their cars on the road, now have as well a much valued element of freedom. Finally, the clearing up of the black market, which is the foundation on which the whole scheme rests will, I am certain, receive the backing of all good citizens.

I have explained these new proposals in confidence to the representatives of the main motoring organisations, who have given them their full support, and for the reasons I have outlined I am confident that they will be welcomed by the majority of motorists as constituting a marked improvement on the present arrangements.

Mr. Churchill

It is, of course, our duly on this side of the House to welcome any sign of repentance, however tardy and however partial it may be, and I certainly do not wish to discourage the right hon. Gentleman, by the questions I am going to ask him, from further efforts to pursue that stony but on the whole righteous path. We have urged the great inconvenience to which the public was subjected, and I should like to ask how it was that these arrangements, which I must say seem to have been very carefully considered, could not have been thought out before striking the blow which caused immense disturbance and heavy internal loss to this country. Why should not all the thought, or a good part of the thought, contained in this statement have been expended in the Government Departments concerned, and the nation have had the benefit of a well-considered, carefully-considered scheme instead of the abrupt and crude cut?

The second question I have to ask is—leaving out the dollar exchange aspect altogether—what is the estimated loss in expense and to the Revenue of the institution and now the modification of the basic petrol ration? How much has been spent in salaries of large staffs to administer this; how much loss can be ascribed to the business of the country and to the inconvenience caused; and how much loss to the Revenue in regard to the fewer licences which have been taken out? Is there any balance sheet which the right hon. Gentleman can present of the loss here? I should like to put those questions, and to ask the right hon. Gentleman if he can give answers to them. At the same time, I do not wish in any way to detract from the admission of error and the effort of repentance which has characterised his statement.

Mr. Gaitskell

I am afraid I must disappoint the right hon. Gentleman. I am in no way repentant and I admit no error. If the right hon. Gentleman will read my statement, I think he will see that I have given very good justification for the measures which we adopted last autumn. In the first place it was necessary, until the black market is stopped, to take those steps, unpleasant as they were. In the second place, until we were assured that we were not going to have to face the prospect of immediate and further severe cuts in imports, it would have been impossible to proceed with this plan. As regards the further question which the right hon. Gentleman addressed to me, answers have, I think he will find, been given on various occasions during the last few months, and the figures, etc. are available, if he would look them up.

Mr. Shurmer

Is the Minister aware that while motorists may be thankful for the concession which has been given for basic petrol for the holidays, there will be considerable disappointment about the date of 1st June, because we shall be losing the Whitsun week, when many people would have taken their holidays? Can my right hon. Friend also say whether he has accepted the Russell Vick recommendation to make a further 10 per cent. cut in the allowance made to goods vehicles?

Mr. Gaitskell

I should have been only too delighted had it been possible to bring this scheme into operation by Whitsun. It is not possible. Indeed, we shall need all the time we can get, both in this House and for other purposes, if it is to be in operation by 1st June. As regards my hon. Friend's second question, there will be a 10 per cent. cut in the allocation to commercial vehicles, but I must emphasise that that does not constitute a saving additional to the 100,000 tons I mentioned.

Commander Noble

Is the Minister renewing the allowance to members of the Forces on foreign service leave?

Mr. Gaitskell

I should like to have time to consider that.

Miss Bacon

When my right hon. Friend refers to supplementary allowances, does he include both "E" and "S" coupons or only "S" coupons?

Mr. Gaitskell

Both.

Lieut.-Commander Gurney Braithwaite

I understood the right hon. Gentleman to say that under these new arrangements no appeals could be considered. Does that mean that he is not prepared to receive representations from hon. Members of this House about cases of hardship which come to their notice?

Mr. Gaitskell

I said that I could not consider appeals against the principle of taking the standard allowance from recipients of supplementary allowances. Of course, the ordinary right of appeal exists.

Mr. Mikardo

In calculating future consumption, has the Minister taken into account the drop in the number of unused supplementary coupons returned, which is likely to result from the introduction of a free element in the allowance for supplementary users of petrol? Secondly, is it implicit in his statement that if the black market does not disappear to the extent he hopes, these arrangements are not likely to be continued?

Mr. Gaitskell

The answer to the first question is "Yes, Sir." The answer to the second part is that the whole of this scheme depends upon suppressing the black market, and if we do not have the co-operation of motorists and everybody else, then the scheme may have to be abandoned.

Mr. Churchill

Is not that a very serious statement, because people are now invited to take out licences and make their plans on the basis of the statement which has just been put forward? Let me say at once that every effort must be made to stamp out the black market; but supposing these efforts do not succeed in overcoming the ingenuity of those engaged in these evil practices, are we to assume that all this is to be swept away, when people have taken out licences and made their arrangements—that it will all be taken away? Would it not be better to say that this scheme will have at least a year's run?

Mr. Gaitskell

I am not suggesting that we would suddenly abandon this scheme, but merely pointing out that it does depend upon the suppression of the black market. Obviously, if it is not suppressed, we could not go on with the scheme indefinitely.

Sir Arthur Salter

Will the Minister ensure that there is sufficient petrol for foreign visitors in order to avoid the very considerable danger of a great loss in dollar earnings?

Mr. Gaitskell

Announcements have already been made on that subject by the President of the Board of Trade. A very substantial allowance is being granted to foreign visitors.

Mr. Rankin

Is it not clear that if my right hon. Friend obtains the co-operation of the motoring fraternity in this scheme, the black market will be suppressed?

Mr. Gaitskell

I think the answer is, "Yes."

Mr. Churchill

I should like a direct answer to the point whether we may take it that this scheme will be given a run for a year.

Mr. Gaitskell

I have nothing to add to what I have said on this subject.

Mr. Butcher

May I ask the Minister whether the standard ration is to be standard, irrespective of the size of the car, or will it be related to the horsepower of the car?

Mr. Gaitskell

It will be related to the horsepower of the car.

Mr. Scollan

Can the Minister say what is the estimated extra cost of this scheme?

Mr. Gaitskell

I should prefer to have notice of that question.

Mr. Boyd-Carpenter

What effect will this announcement have upon the applications for supplementary petrol at present pending with the regional petroleum officers, and can the Minister also clarify the position with regard to the holders of supplementary petrol coupons? Does his statement mean that the holder can use his car for any purpose up to a maximum of 90 miles a month or is there some other implication?

Mr. Gaitskell

There are somewhat complicated administrative arrangements to be made, and I do not think that I should now involve myself in a long explanation. All these things will be made perfectly clear to the public. We shall be publishing a leaflet setting out exactly what the position is, and I think that hon. Members will find there the answers to their questions.

Mr. C. S. Taylor

Cannot the Minister give us any sort of security of tenure about this matter? Does he not realise how impossible it is for all the business people who depend upon motorists? It is impossible for them to make any plans unless they know where they stand.

Mr. Vane

Does the right hon. Gentleman intend the control of the black market to be the responsibility of the police, or does he intend to recruit a private army of his own, like the Minister of Food?

Mr. Gaitskell

It is one of the recommendations of the Russell Vick Committee's Report that it should be in the hands of the police.

Mr. Erroll

Does the Minister intend to colour the petrol as recommended by the Russell Vick Committee?

Mr. Gaitskell

Yes.