FINANCE BILL

HC Deb 30 April 1952 vol 499 cc1506-613

Again considered in Committee.

[Colonel Sir CHARLES MACANDREW in the Chair]

Amendment proposed: In page 1, line 16, leave out subsection (1)—[Mr. Jay.]

Question again proposed, "That the words proposed to be left out stand part of the Clause."

6.15 p.m.

Mr. Hollis

As I was saying, I happen to represent a constituency which includes a large area of the suburbs of Swindon and which has a very considerable railway vote. One of the most persistent points that was put before me again and again at meetings during the last Election, with great courtesy and force, was this. I was told that the railways were, in the first place, a strategic necessity and secondly, that they were in a bad way. Thirdly, I was told that they were in a bad way because, obviously, to some extent they had lost traffic to the roads but that they had lost much more traffic than they need, or should, have done on economic grounds because road transport operated at a great and unfair financial advantage over rail transport.

I was told that the railways have to maintain their own permanent way, whereas people who journey by road travel on a road which is maintained at public expense. I pointed out that the motorist, at any rate, made his contribution in taxation by the motor tax and through the petrol tax. But while that was true, I was told, the motorist's contribution was not nearly large enough, and road transport was unfairly advantaged.

I do not say that I agree altogether with that argument. Obviously, when we are talking about fair shares, it is very difficult always to know exactly what is a fair share; but that perfectly honour-able and coherent argument was put before me 10 or a dozen times during the course of the Election. There were only two conclusions that I could deduce from that. One was that it must be the policy of the Socialist Party to subsidise the railways, or it was not; and if it was not, it must be their policy in some way or other to make road transport more expensive—either one must be made cheaper, or the other must be made more expensive.

We have now been told by the right hon. Member for Lewisham, South (Mr. H. Morrison), that it is not the policy of the Socialist Party to subsidise nationalised industries. If that whole argument was a fair and coherent one—I am not saying whether it was, but it was put forward as such—why is it not a mere act of justice to bring road transport up to a cost which would mean that what is, according to that argument, a reasonable proportion of the nation's business would go back again on to the railways and thus the railways would be kept fully occupied, which it is necessary that they should be for strategic reasons?

That was a perfectly coherent argument. I did not altogether accept it, although I was interested in it, but I came away with the very definite impression that that was what my Socialist friends believed. If that be so, I cannot see why there is such a fuss now at what the Chancellor of the Exchequer has done, although he has done it for quite different reasons. I should have thought that my right hon. Friend was quite right.

Mr. Pannell

The reaction this afternoon of hon. Members opposite to the petrol tax is rather curious. I was pleased when the hon. Member for Croydon, North (Mr. F. Harris), made his contribution; at least, he was consistent with a quotation I have from a speech in which I interrupted him two years ago. I do not think, however, that the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), who is not now in his place, is at all to be congratulated on consistency.

As I said in a previous debate, the noble Lord spoke in 1948 in favour of an increase of 2s. or 3s. in the tax when no proposal to increase it was before the House. In 1951, the noble Lord spoke bitterly—I have a full quotation, but will not weary the Committee with it—against an increase of 4½d. This year, of course, the double somersault has been done, and for various reasons and irrelevant considerations the noble Lord on the side of the Government comes down again for the tax. I said on the Second Reading of the Finance Bill that that shows what a stern unbending Tory can do when he goes in for acrobatics. I think that is a quite fair comment. The other speech we have had in favour of this increase was from the hon. Member for Kidderminster (Mr. Nabarro) and I would ask him to read the speech he made last year.

The considerations today are quite different from those of last year. To support raising the tax on a commodity with a low price of about 2s. 2d., as I think it was two years ago, is very different from raising it to 4s. 2½d. Whereas last year we were pegging the food subsidies at a cost of £410 million and financing them by a tax on petrol, this year the food subsidies have been cut by £160 million and prices have been allowed to run free.

Although my opinion on this subject is well known to my party, I think it reasonable to point out that the position last year was very different from that of this year. In case any hon. Member asks why I voted in favour of the tax in the last two years, I would say that that was the main consideration. I still have the advantage over hon. Members opposite that at least I had the grace to keep my mouth shut and I am not on record to be quoted.

Everyone knows that the petrol tax is inflationary in its incidence. If a tax is put on cigarettes or a bottle of whisky—that may interest hon. Members opposite far more—[HON. MEMBERS: "Oh."]—it interests my hon. Friends as well, but I am trying to get points of agreement—the matter is finished with. But when a tax is put petrol it is completely inflationary. It not only affects the man travelling to work, but the distribution of foodstuffs and a series of commodities which we need. One does not have to state these cases, because they were stated with such coherence and force by hon. Members opposite last year.

I also find a curious inconsistency here between the fact that this tax is being put on and supported, presumably, by hon. Members opposite, and the statement made by the Home Secretary on Monday on fares. When all is said and done, when we are discussing fares we must bear in mind the considerable time lag by the time procedural steps have started—the application for increase of fares and the inquiry. Those fare increases were based on the price of petrol and fuel prevailing at the time.

Of course, we run into very different circumstances now and this tends to heighten the difficulty and start another long series of fares increases. I understood, Mr. Bowles, from the Ruling of your predecessor, that it would be possibly out of order for me to go into questions of the Diesel effects of this consideration and I will pass on to other matters, but I wish to say that, of course, it is an element in the general tax we are speaking about today and it is rather difficult to separate it.

I think it is time petrol was looked on in this country in the same way as coal, as an element in production. I find that 2s. 6d. tax on a gallon for Diesel oil is equal to a £25 tax on a ton of coal. That would mean on the "Flying Scotsman," running to Edinburgh, a tax of £213—£1 per passenger. It seems that road transport is a reasonable milch cow for successive Chancellors, but it is no use hon. Members opposite saying that transport is unaffected by these considerations; they are so much on the record.

The right hon. Member who led for the Opposition last year, the present Leader of the House, rather sneered at Front Bench Members on our side and indicated that we had a pool of private cars and did not have to use taxis. He went on to refer to the increase in provincial bus rates and things of that sort. It is very difficult to sort out the many pages of quotations one has on this subject but, bearing in mind that we had a debate on Monday evening which ended with the Parliamentary Secretary to the Ministry of Transport speaking, it is reasonable to refer to the remarkable contribution he made to our debates last year. He suggested that this was a food tax and went on to say that it was more than that—the tax on petrol was a contribution towards the sacred cow of the Socialists, British Railways, and an attempt to drive traffic off the roads. That was the sort of contribution we had then.

It is not only a matter affecting London with which we are concerned, but a matter applying all over the country. There are so many pages of quotations I could use, but I am trying to hurry along. [Laughter.] It is a matter for hilarity, but if hon. Members had taken the trouble to read their own speeches, they would have laughed at the noble Lord and the hon. Member for Kidderminster.

Sir Edward Boyle (Birmingham, Handsworth)

For the sake of the feelings of the hon. Member and the time of the House, could we have the quotations circulated in the OFFICIAL REPORT?

Mr. Pannell

That is quite fair, but one has to put them in as evidence and one has to hold them here because one has been waiting to see these hon. Members rise this afternoon.

If we consider the position of London transport, we find the same sort of thing as in the City of Leeds, which has an estimated deficit at the end of March, 1952, of £322,000. That deficit was based on the old price of petrol and, of course, last year the Elections were largely fought in Leeds on the question of transport fares. Wherever we look we find there are fares applications, and no one really believes that the Government have pushed off the increase of fares by the political manœuvre we saw on Monday, because someone has to pay for those increases in the long run, and they will fall not only on fares, but on foodstuffs and similar things. If the hon. Baronet the Member for Handsworth (Sir E. Boyle) wants all the quotations in a compressed form, he need only read my speech on the Second Reading of the Finance Bill.

What are hon. Members going to do tonight? Presumably they will go into the Lobby. [HON. MEMBERS: "What you did last year."] I stated the very different circumstances last year. But they will go into the Lobby to put up the price of fares and of foodstuffs. I believe it was the late Earl Lloyd-George who said that they would go into the Lobby like dumb driven cattle. That is an understatement, because cattle are bovine, silly, stupid and obstinate. The hon. Gentlemen opposite represent a far faster type of animal. I believe that, as followers of "Rab," they are rabbits—reactionary rabbits—and that they will go into the Lobby in one big scuttle—a scuttle away from the smell of petrol fumes. It will show that their platitudinous attitude in the last two debates when they were in opposition, and their pranks and platitudes in opposition, were merely show, and the blatant ballyhoo and bombast so characteristic of the back-sliders opposite.

6.30 p.m.

Mr. Osborne

I cannot hope to compete with the hon. Member for Leeds, West (Mr. Pannell) in his comic turn, and I should like to bring the Committee back for a moment or two to the tax we are considering. I do not think it does us any good to bandy the speeches of last year, for I, like the hon. Member for Leeds, West was silent last year and nothing can be quoted against me. Speeches can be quoted from both sides of the Committee, but it does not help us.

This tax cannot be judged in isolation. It is part of the general Budget statement. I would remind hon. Members of a fact which from the tone of the debate this afternoon, one might think had been forgotten. This Budget is in a sense an emergency Budget. Hon. Members on both sides of the Committee have acknowledged the existence of the crisis we were facing. The nation was over-spending at over £500 million a year and our very employment and bread were in danger. That is the situation which this tax is assisting to put right, and I would ask hon. Members to remember that background when they consider this proposal.

We all agree that taxes are unpopular and we wish that there were no taxes. Some people would choose some form of tax to be taken off and some another, but we could have a marvellous holiday if there were no taxes at all. However, considering the present financial background which we all admit, I would ask hon. Members what alternative they would propose to meet this emergency? The former Chancellor of the Exchequer said last year: I have repeatedly said that the standard of living"— that is, of the people of this country— would have to fall."—[OFFICIAL REPORT, 8th November, 1951; Vol. 493, c. 357.] Let me repeat that statement. I have repeatedly said"— said the former Chancellor of the Exchequer, rather in the line of thought of Sir Stafford Cripps, for which I respect him— that the standard of living would have to fall. We have to face the reality of that cruel situation and this is one of the necessary steps that the Chancellor so often and so courageously forecast. I have one or two quotations of his rather leaner and hungry colleague—if I may say that about the right hon. Gentleman.

Mr. Gaitskell

Not hungry.

Mr. Osborne

Speaking from memory, I think it was in May on the Committee stage of the last Socialist Finance Bill, and, defending the re-armament programme against the Bevanites at that time, the previous Financial Secretary to the Treasury said re-armament could not be completed without lowering the standard of life of our people. Let us admit that this does involve lowering that standard. If hon. Members opposite do not, they are fooling our people and trying to get cheap votes at the local elections by going away from the facts which previously they admitted existed.

But if hon. Members opposite do not like this form of taxation, or the lowering of the standard of life, what alternative do they choose? Would they rather have a more severe cut in the social services, and if so, where? Would they rather have the whole of the food subsidies removed, or a cut in old age pensions? They admit the crisis is there. This is one of the necessary steps which the former Chancellor said must be taken to meet the crisis. The only point I wish to make is that to look at this tax in isolation is to fool ourselves and to be unjust to the people of this country.

Sir Leslie Plummer (Deptford)

I wish to bring the discussion back to agriculture and illustrate the effect that increasing the petrol tax will have, and will continue to have, on the mechanisation of agriculture throughout the United Kingdom. There are about 350,000 tractors in the country and approximately one quarter of them are driven by petrol. Considering the advances which have been made, particularly in the last few years, regarding Diesel tractors, this is a very high proportion, but there are two explanations. One is not very serious, but is an illustration of the initiative and enterprise of the farmers of our country.

It will be remembered that during the war a new petrol-driven tractor was produced. It was popular among farmers because they found that if they got one and put it away in their barn and did not use it, they could convert the petrol coupons which they got for it to other purposes. There was a rush to buy this particular tractor which was at least satisfying to the sales manager of the company producing it, and which was stopped only by the introduction of coloured petrol.

The other reason, which is much more serious and important, is that the petrol-driven tractor is efficient. It has a higher ratio of efficiency than the tractor driven by paraffin vaporising oil. The draw-bar power is greater and its high thermal efficiency is undoubted. It is more economic, because the amount of lubricating oil used is not so great as with the paraffin vapourising oil-driven tractor.

The cost of running these petrol tractors has now become prohibitive, with the result that the small farmers, who, it is said, are now being recouped for these increased prices by the new price review—a statement which we are quite incapable of checking, because we have not yet seen the details on which the farm prices have been awarded and will doubtless have to wait another three weeks for them—these small farmers are finding that the costs are really quite prohibitive.

I should like to give the Committee some examples. I assume that a petrol-driven Ferguson tractor, which is used very largely by small farmers, is operated for 10 hours a day for five days a week, and, on the basis of the petrol tax being 2s. 6d., it costs in a year £325 in tax, which is the equivalent of another driver, who never drives the tractor but who is on the wages list. That means £6 5s. a week in tax for running a tractor of this kind, and the recent increase of 7½d. in the tax on petrol amounts to £80 a year or 30s. a week in additional taxation.

With what result? With the result that the sale of petrol-driven tractors, which have a higher efficiency and should be encouraged, is being depressed, and that agriculture has to turn over to paraffin vapourising machines, which are not so competent. The result is that a premium is being placed on inefficiency and more work is being put on the driver of the tractor, and this is a burden which the small farmer, trying desperately to increase his productivity, is finding a very serious one.

The small farmer is also dependent on stationary engines, of which there are hundreds of thousands throughout the country. They perform all sorts of jobs, and particularly they are used to drive milking machines, and are playing a great part in this drive for the mechanisation of agriculture. I find that 93 per cent. of these stationary engines are on small farms, and we can easily envisage the situation of a small dairy farmer who has a dozen cows, which is somewhere round the average, and who is selling 20 gallons of milk a day. Under the price review, he will get another 2s. 6d. a day for his milk, and it will cost him 7½d. more, or 25 per cent. of that increase, in increased petrol tax alone. It is a burden on him, and it is unthinkable that it should be forced upon him at this particular time. He cannot turn over these stationary engines to other fuel. So it goes on right through farming and agricultural machinery generally.

I wish now to refer to the combine harvester, and I have two of them. I have one with a 12-foot cut and another with a 8 ft. 6 in. cut, and they do approximately the same job in the same time. The extra tax on each of these, on the basis of cutting 25 acres per cutter-bar-foot, is £15 12s. 6d., or over £31 for two petrol-driven combine harvesters that will not work so efficiently on any other fuel.

This direct charge on agriculture has a double effect. It costs the industry a lot more money which it should not have to pay. I understand that the Chancellor expects to get from agriculture £2.2 million more from the oil tax this year. But it also drives the farmer, and particularly the small man, to use a substitute for the petrol engine which is not as efficient and effective as the petrol-driven machine. At a time when manufacturers are trying to standardise the production of tractor motors so as to use them either in motor cars or tractors, their efforts are being frustrated, because the farmers are being driven into using second-best alternatives.

It is for these reasons, and because I know that the Chancellor has the interests of agriculture so much at heart, that I ask him to look at this matter again, in order to see if some more attention cannot be given to the situation of the smaller farmer and some assistance given to relieve him of this unnecessary burden.

6.45 p.m.

Brigadier Terence Clarke (Portsmouth, West)

I wish to draw the attention of the Chancellor to what I think is an alternative method which we might consider in connection with this petrol tax. It is a lot to ask the Chancellor to give way when he has given a great deal of thought to the matter, but, nevertheless, last year, we said that this tax was going to put up the cost of living, and there is no doubt that it will. I did not speak in the debate last year, but I shared the views that were held at that time.

There is no doubt that, if we have this tax on industry and on transport, it will increase the cost of living. I know that the Chancellor has his difficulties, now that we are not getting any oil from the Abadan refineries—we have heard about that in full measure—and that he has to save dollars and raise money to pay for the social services which the country wants and for which hon. Gentlemen opposite press so strongly. But why put up the cost of living by imposing this tax on transport and industry?

Could not my right hon. Friend allow, with reasonable safeguards which the Treasury would soon be able to devise, a method whereby industry might claim back either the whole or a portion of the tax against the receipts for the amount of petrol which they have bought? The public would then pay the tax on pleasure petrol, and industry would get a rebate on the petrol used for necessities. Such a method would also obviate the necessity of a return to red and white petrol, which would be deplorable. I feel that the Chancellor, with his ingenuity, could easily find some way of allowing such a rebate.

I should also like to see some concession made in regard to the use of hydrocarbon oils in the cleaning industry, because the new tax will increase the cost of every article which is cleaned in this country. We want to save our clothes, and avoid having to buy clothes more often, because we are trying to economise in this country today, but if we put this tax on dry cleaning it will mean that people will not be able to have their clothes cleaned as often as they have been doing, and we all know that clothes deteriorate if allowed to remain dirty, and that grit and other matter wears away the wool.

If we cannot find a way of alleviating the burden of this tax on that industry, we shall be contributing towards a rise in the cost of living, and I would invite my right hon. Friend the Chancellor, when he replies to the discussion, to try to find a way of compromising or removing this tax from this industry, while leaving it to apply to all pleasure petrol.

Mr. W. R. Williams (Droylsden)

I have listened with some interest to the cross-debate that has been going on, and I have noted how one side of the Committee has reminded the other of what was said and the arguments used during the debate on the last Budget. Fortunately or unfortunately, as hon. Members may look at it, I cannot say that I either spoke or voted one way or the other in that debate, because I was not in this House.

I was, however, in this House between 1945 and 1950, and I was very interested to note then how the Opposition tried to extract from the Chancellor of the Exchequer the maximum of concessions concerning the things in which they were primarily interested. If I do not touch at length on the question of fares, it is not because I am not very much interested in the matter. As a matter of fact, during my recent connection with Post Office workers, I was particularly struck by the hardship which the imposition of higher fares is bound to have on the cost of living of the men and women in that great public service, especially those on the basic scales and those on the lower incremental scales.

There is no doubt that in due course the transport authorities, the omnibus companies, and others will inevitably be bound to increase their fares as a result of this higher taxation. I am perfectly satisfied—and I have no doubt that many hon. Members on both sides are also—that we have practically reached the limit of what we can enforce upon men and women by way of higher travelling costs. I think we are all satisfied that we have reached a point where real hardship is being imposed owing to these increased fares.

I know of young people in the outer London area who have to travel to London every day to work, and I know that higher fares are imposing great hardship on them. They are having to go without some of the essential things in life in order to pay the increases. Having said that, I will leave the question of the Petrol Duty in relation to fares and make one or two suggestions in connection with the light hydro-carbon oils used in industrial processes.

In referring to this subject, I want to mention a deputation and talks I have had with representatives of the interested trade unions and with managements of a number of industries in my constituency, who have assured me that they will come up against very real difficulties if this increase to taxation is imposed upon them. One of the industries concerned is the rubber proofing industry which uses such oils a good deal in its rubber solutions, and so on. Another firm is connected with the paint and varnish industry. The representatives of both these firms and of the trade unions concerned assure me that if this taxation is imposed it will result almost inevitably in unemployment in their industries.

I know that the Chancellor is fully aware of the situation in Lancashire, and there is no need for me to develop at any length the position of industry in that county. As far as textiles are concerned, we have had a tremendous increase in unemployment in my constituency. The Chancellor knows of certain firms in that area who are being hard put to it to retain anything like a skeleton staff in their establishments.

We have had a debate on the broad issue of textiles, but the point I want to put to the Chancellor this afternoon is that I hope he is not going to make it difficult for some of the smaller firms in that area to carry on. Some of them are trying their utmost at the present time to retain staff, although, because of the deterioration in trade, they could very well dispense with their services. But they are trying, nevertheless, because of the peculiar unemployment situation in Lancashire, to retain their employees in the hope that better times will come.

There are three arguments which I want to adduce in support of the suggestion that the Chancellor might like to have another look at this question of light hydrocarbon oils. I understand that quite a number of Government contracts are already involved in come of these industries, and we are not unhopeful that there will be many more which will come within the ambit of the £20 to £25 million about which the Chancellor was talking in regard to the defence programme.

It seems to me that, if imposed, this tax will act as a sort of boomerang. The country will not only be paying it on the ordinary materials produced, but also on Government contracts. In the second place, I am assured that there will be a tremendous adverse effect on the home market. As the Chancellor knows, the pipelines in Lancashire are very full indeed, and although many of the manufacturers are trying to sell at under cost price at the present time they are still finding great difficulty in getting rid of their goods.

Therefore, even from the point of view of the home market, it seems to me that there is a case for a review of the matter. But more important, possibly, is the fact that our industries will be up against almost impossible competition in the field of exports unless something is done about this tax. In a pamphlet which has been sent to me, and which I have discussed with representatives of the firms I have already mentioned, it is stated that most other countries with whom we are in competition regarding rubber proofing, paints and varnish, and so on, have already given very substantial remissions of tax in order to allow their industries to compete much more favourably with our industries in the international market.

The pamphlet says: It is significant that Italy and Western Germany, now recovering their economic freedom and capacity to compete with the United Kingdom in overseas markets, have both granted a preferential rate of duty on light oils used by their industries. The fact that these countries have taken this step at the first opportunity demonstrates the importance they attach to the freeing of their industries from unnecessary impediments. Not only have countries in Europe and Scandinavia done this, but I understand that many of our Commonwealth countries have done exactly the same thing.

Therefore, for those three considerations—Government contracts, the home market, and, above all, our competition in foreign markets—I feel that I am reasonable and rational in making my suggestion to the Chancellor. I always feel sorry for Chancellors, whatever their political colour, because they have to find the money, and everybody wants them to find it in a way which will not affect them. But the imposition of this tax will accentuate still further the rising cost of living of our people, and I feel certain that the Chancellor would not wish to do that.

As I said at the beginning of my speech, there comes a point where some of these things defeat the very object that he has in mind. I feel certain that this increase in the Petrol Duty is of that nature, and, therefore, I ask the Chancellor to review in whole or in part these proposals in his Budget in the interest of the industries to which I have referred.

7.0 p.m.

Brigadier O. L. Prior - Palmer (Worthing)

Before coming to the question of the increase in the Petrol Duty, I want to answer one or two of the points put forward by hon. Members opposite. It was only on Monday that we had a debate on transport and fares, and hon. Members were saying that something must be done to prevent road transport, both of freight and passengers, from competing unfairly and unduly with the railway. Will not this duty do exactly that?

Those who travel by roads at fares very much cheaper than those which prevail on the railway must realise that buses and lorries are having their permanent way kept for them. Admittedly they pay their ordinary licence duty, but that is an infinitesimal amount compared with the cost of upkeep of roads and bridges. Vehicles on the roads also have all their signalling and traffic control done for them free of charge and it must be realised that they should bear some of the burden of our present adverse balance and their customers should not grumble too much.

I am not absolutely certain, but I think that one can travel from Newcastle to London on a passenger bus for approximately half the fare on the railway. I say "approximately" because I am not going to be tied to my figures. Even if road passengers had to pay something a little nearer to the railway fare than half they would still not be doing too badly.

One of the reasons my right hon. Friend the Chancellor gave for the increased Petrol Duty was the need to economise in dollars and to reduce the import of petrol to this country. I very much wonder whether that is really a valid argument. By how much will petrol be cut? There may be some cutting down on pleasure motoring but if that were eradicated altogether it would represent in terms of petrol a virtual drop in the ocean; and road transport must go on. This duty will not cut down the number of buses and lorries, and therefore I cannot see that it will mean much saving of petrol which comes from the dollar market.

It is the same old story of dealing in isolation with one aspect of our problem. There is a vast problem to be solved and we have gone a certain way towards solving it. But we have not yet heard on either side of the Committee what is the real solution. I am not an economist nor have I financial brain, but I hope this country will produce a big enough financial brain to solve this obvious problem of the vicious circle of wages and prices chasing each other. I have not known a single Chancellor of the Exchequer who has said, "We will cut into the circle by this means" and then broadcast to the people of the country and told them what he is doing.

These palliatives are of no use. We are suffering from an acute disease—it may be appendicitis or something worse—and we are taking aspirins for it. I admit that this Budget was brought in very soon after my party came into power. It is a short-term emergency Budget but in the long run, and as a long-term measure, I hope that we shall have from this side of the Committee some proposal that really will solve our problem. I am certain that the workers and managers in industry would do anything provided they could see an end to it and see the light over the hill again.

If the Chancellor got up and said, "Do this, and in three years time we shall be square" he would have everybody with him. Incentives are all right in certain industries but it is no use providing a man with an incentive if he knows that the raw materials are not available or that the warehouses are filling up, and that his employer, despite the best will in the world, will have to reduce his salary. It is no use asking the girls to work another half-hour during lunch time in those conditions.

The Temporary Chairman (Mr. Frank Bowles)

The hon. and gallant Member is going rather wide of the Petrol Duty.

Brigadier Prior-Palmer

I beg your pardon, Mr. Bowles. I quite agree, but the Petrol Duty is part and parcel of this big problem.

Mr. John Taylor (West Lothian)

This debate differs from many others through which I have sat in the hope of catching the Chairman's eye inasmuch as in other debates previous speakers have always dealt with points that I proposed to deal with and have made them one after the other. In this debate the contrary has happened. So many points have arisen that successive speakers have had increasing material on which to speak. But I must resist the temptation of dealing with the general points and confine myself reluctantly—though perhaps I should say gladly—to the small point of the effect of this duty upon the native oil industry of this country.

It has been mentioned already by my hon. Friend the Member for Midlothian and Peebles (Mr. Pryde), who shares with me the representation of the two constituencies which house our native oil industry. It is a remarkable industry which has had many setbacks and has survived fierce and often unfair competition, and has been subjected to many kicks, some of them in the teeth. Any less resilient industry would have folded up in the face of its repeated difficulties.

We should be grateful that the industry has survived so sturdily today and I am honoured to put up a small plea for special consideration and protection for it. Most of this country's shale oil mines are in my constituency. Hon. Members who have travelled over the Forth Bridge will have seen flat-topped red hills which are like miniature editions of Table Mountain except for their colour. They mark the shale mines. Oil was being produced from them 100 years ago, eight years before the first oil well came into production in Pennsylvania. Production in America almost killed our native shale industry because of importation from the much more prolific American oil wells.

Now I ask the Chancellor of the Ex-chequer to recognise the poetic justice of protecting this industry and, if possible, nurturing and developing it. My hon. Friend the Member for Midlothian and Peebles had other things to say about its history. I am more concerned with the figures of its present production, which is about 1,500,000 tons, from which in 1951 we produced about 105,000 tons of crude petroleum and about 100,000 tons of refined products.

But this remarkable industry does not waste anything. We have heard of the economics of pig breeding in which everything is used except the squeal. The Scottish shale industry has a similar record. From its operation we run sulphuric acid works, a candle factory and a brickworks, and we are concentrating attention on motor spirit, solvent naphthas, deisel oil, paraffin wax and synthetic detergents. This country would not get any of the those commodities elsewhere without the expenditure overseas of valuable capital.

The industry employs 4,000 of my constituents. It has moved with the times. It uses the most modern retorts; it uses electric power for drilling and for transportation of the shale. It has installed the most up-to-date safety devices in its winding machinery. It operates its own refinery. Yet production today is confined to only 11 shale mines. It is not my purpose in this debate to ask for expansion and development—it would be out of order if I did so—but that will perhaps come on a later occasion.

Sir William Darling (Edinburgh, South)

Are those mines State-owned or are they under private enterprise?

Mr. Taylor

I have already paid my tribute to the management of those mines. I will have a talk with the hon. Member about that point later. It is my purpose to plead for practical assistance which the Amendment standing in the names of some of my hon. Friends and of myself would give if it were agreed to. I hope that the plea has not fallen on deaf ears.

It is a small step for the Chancellor to take. It is a concession which he could make. I believe it is possible; I do not think there is any international difficulty arising from G.A.T.T., and I think that this is a richly deserved encouragement which the Chancellor should give to this industry in my part of the country which has pioneered world oil production—this valuable national asset. In doing so he would be helping not only my constituents but the whole country.

The Chancellor of the Exchequer (Mr. R. A. Butler)

We have had a debate which has lasted from 3.30 this afternoon and we have listened to some 25 speakers. I think this presages well for the future progress of the Bill because the atmosphere has been one in which I think hon. Members have attempted to put forward constructive points very largely from the angle of their own constituencies or, at any rate, from the angle of their own anxieties. I shall do my best, in a short reply, to answer some of the points raised.

Under the direction of your predecessor in the Chair a few minutes ago, Mr. Bowles, it was understood that this would be a general debate to be followed by rather shorter debates on the Amendments. I think it would be for the convenience of the Committee, therefore, if we could now come to a conclusion on this general debate, because there are so many other points to consider. The Government are not trying to be unreasonable in launching themselves slowly on the Finance Bill in the company of the Committee, but it is reasonable to say that we should cover the whole subject of hydrocarbon oils and so forth in the course of today's sitting without keeping hon. Members too late and with proper consideration for the problems of transport and so on. If we can bring this general debate to an end fairly soon, we can then get on to the Amendments and we shall have shown people here and outside the House that we can conduct our business in the right way if we want to.

The debate has been severely practical. There is one matter that I should like to tell the Committee first of all, and that is that I am putting on the Order Paper a very simple Motion about bringing up a particular Schedule to discuss it with the Purchase Tax Clauses. I am only giving warning of that so that hon. Members may know that when we reach that point in about 10 days' time or so, they will feel that they have been warned about it, as many of them have been privately. The sole object is to bring the whole of our discussions into one and to make it as businesslike as we can. Every opportunity must be given to hon. Member to put their own constituency points of view.

I cannot deal with all the points raised, but may I first of all deal with the question of the shale industry, which was raised by the hon. Member for West Lothian (Mr. J. Taylor) and which was dealt with at the beginning of the debate by the hon. Member for Midlothian and Peebles (Mr. Pryde). As those hon. Members will know, there is at present a preference on excise for the home industry, and I would remind them of the benign and, I believe, useful provisions of the Finance Act, 1950, namely, Section 2 (1) (a) of that Act, which permit the amendment of the margin of preference for the home industry if a case is made out. I do not on this occasion say that a case has been made out; and, in fact, despite the sincerity with which the case has been put, I would not say that the industry is in very great difficulty or danger as a result of this move, or indeed of any other.

But I would say that if hon. Members feel genuine anxiety, and if they are so advised, they can always remind their friends in the industry that there is the possibility of putting their case to the Treasury and the Customs and Excise, and there is the possibility of amending the preference by Order. There is an opening for them if they feel genuinely aggrieved. I repeat that I do not think that their noble industry, which they have described with such emotion and clarity, is suffering to the extent that they imagine.

I will come to the right hon. Member for Battersea, North (Mr. Jay)—our modern Cassius according to one intervention in the debate—during the course of my remarks. There are one or two other hon. Members who have raised particular points. There is, for example, the hon. Member for Norfolk, North (Mr. Gooch), whom I am glad to congratulate on becoming Vice-Chairman of the Norfolk Council Council. I hope that he will carry out those duties with the same distinction as we associate with him here. Then there is the hon. Member for Deptford (Sir L. Plummer) who has the honour and dignity of living in my own constituency.

Both hon. Members have referred to the case of agriculture. No doubt this may come up later in the evening, but I would remind the hon. Member for Deptford—as I believe he knows, since he mentioned it in the opening part of his remarks—that full account has been taken of the incidence of the rise in the cost of petrol in framing the price schedules which have been announced. That is the answer to all those who are geuninely interested, as I am myself, in the agricultural industry. I therefore believe that those machines which cut the swathes in my constituency need not be overburdened by the action which their own Member has taken.

7.15 p.m.

There are one or two other hon. Members who made useful interventions. I was somewhat concerned, and charmed, by the intervention of the hon. Member for Bristol, South (Mr. Wilkins), who said that he had not been able to speak in the House since about 1946. I can only say that a change of Government has certain advantages. The hon. Gentleman is relieved from the odium of being a Whip, and is able to take part in the deliberations in this Chamber with more freedom. I was concerned to hear that in order to keep his car going and to pay me the Petrol Duty, he is obliged to give up smoking, and as these two taxes are great competitors in the Revenue, I would only ask him to exercise greater moderation in both ways and to use a little less petrol and to continue smoking more heavily; then I shall feel very happy at the thought that he is not only speaking well in this Chamber but he is also contributing his due share to the Exchequer.

The hon. Member for Devizes (Mr. Hollis) mentioned the railways at Swindon. I will not go into those arguments today, but there is something in the general argument that there must be an equal sharing out of burdens, if possible, between road and rail. The hon. Member for Woodside (Mr. W. G. Bennett) and one or two other hon. Members, including my hon. Friends the Members for Croydon, North (Mr. F. Harris) and Dorset, South (Viscount Hinchingbrooke), were anxious to know what the duration of this tax is likely to be. I feel complimented to think that, in the eyes of these hon. Members, however critical they may have been on other matters, I have before me a very long tenure of office. I only hope that before my long tenure of office is concluded some adjustment can be made in this tax. If, on the other hand, by their anger my tenure of office should be in any way shortened, I shall be unable to meet them in any way.

Hon. Members have expressed a genuine anxiety about the incidence, of the Petrol Duty, and this was summed up in a rather dramatic way by my hon. and gallant Friend the Member for Worthing (Brigadier Prior-Palmer), who did not seem to like the tax or my policy in any way at all. I would draw his attention to the very weapon to which the right hon. Member for Battersea, North, referred with such disdain, namely, the Bank Rate, which he alleges is costing us £70 million a year. If he refers to that measure for the purpose of any forthcoming speech which he may make, he will realise that with its help and in other ways, some of them orthodox and some difficult, we have managed—I say this in all seriousness—greatly to improve our external sterling financial position. We have, by methods such as this, to which I will come in more detail, managed in six months to staunch the flow of blood which was threatening the very existence of this island, and which we must all acknowledge whatever our views may be. Therefore, when criticisms are made of the Administration, I hope it will be realised that we have tried to serve our country and that so far our efforts in this direction have been crowned with a certain amount of success.

Why, then, was it necessary to introduce this tax? I hope that I am a healthy Chancellor of the Exchequer when I say I regard all taxation as bad. There are only different degrees of evil in the incidence of any particular levy. This particular tax has the advantage of being—and I use words which I hope are familiar to the right hon. Gentleman the Member for Battersea, North—thinly spread and widely borne. When the right hon. Member for Leeds, South (Mr. Gaitskell) was asked to publish his extracts from our speeches in the OFFICIAL REPORT, I would only remind him that there is no need to quote extracts from speeches of hon. Members and right hon. Members on this side of the Committee in favour of the petrol tax; I can simply refer to the bound volumes of debates last year and I can quote from them one or two extracts of speeches from hon. Members opposite in favour of a petrol tax, although perhaps at a lower rate than this.

I have the assurance of hon. Members opposite that this tax is good because it is thinly spread and widely borne. The real reason for having had to turn to this tax was hinted at by me before the Budget, in my two statements of November and January, and was then further alluded to in the Budget statement. It seemed to me at that time—and no argument has prevailed which has countered that view—that it would be wise to try to relieve the strain upon the oil position.

I go back to the statement made by the right hon. Member for Battersea, North—who is very helpful to me today. These are his words: … some restraint on the less essential uses of an imported commodity … is necessary on the grounds of general national economy."—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 882.] If that was true before the crisis which broke over this Government when we took office, surely it is even more true today. That is a further answer to the hon. and gallant Member for Worthing who is anxious, together with some of his friends—and quite reasonably—about the incidence of this tax. Increased savings in our foreign exchange will result from the duty only if there is a reduction in consumption. At the same time, if we cannot get a major reduction in consumption—and it certainly did not look like it during these last Easter holidays, at any rate from the point of view of the ordinary motor car users—we can at least impose some check on future growth.

I would remind the Committee that when I spoke in January I did consider the possibility of a rationing scheme for petrol. That was the scheme to which my distinguished and much lamented predecessor, Sir Stafford Cripps, had to resort in a period of similar crisis: but I decided, I think rightly—and I hope the public will give credit for this—not to reintroduce petrol rationing. It would not have brought in sufficient saving. It would have cost us, in administration, some 2,500 people to work it and it would probably not have brought in sufficient saving despite the great effort to work it absolutely fairly.

Therefore, I fell back on an increase in the tax on petrol. Various hon. Gentlemen have raised the question whether there is any genuine justification for a Chancellor of the Exchequer deciding to impose an extra tax on petrol. There appears to be some misunderstanding about the precise significance of oil in the United Kingdom's balance of payment. The position is roughly this: a large part of the petrol and other light oil, and the heavy oil used in road vehicles, comes from refineries in the United Kingdom belonging to British-controlled or American-controlled companies. The balance is imported from refineries overseas, some of which are operated by British companies and others not; but all these oils, to a greater or lesser degree, cost this country some foreign exchange.

Where the oil is refined in the United Kingdom, the foreign exchange cost arises in respect of crude oil and also in the net profits earned by the American companies, where they do the refining. With oils refined by British-controlled companies overseas there is a large element of foreign exchange involved, both in producing the crude oil and operating the refineries. The hon. Member for Kidderminster (Mr. Nabarro), in a characteristic and excellent speech, referred to the increase of dollar content in the general oil transactions. It is very difficult for me to give precise figures, but I can refer the Committee to the Economic Survey, paragraph 25 of which says: Purchases of dollar oil to replace Persian oil have been costing the sterling area in this initial period over £100 million a year, the greater part of which is reflected in the United Kingdom's invisible account. As the hon. Gentleman will know, there are certain drawbacks from this which bring it down by at least £25 million, because the adjustments we used to make with the Persians are no longer made.

It has been absolutely just for hon. Members on this side of the Committee to refer to the loss of Abadan. Leaving aside all the political aspects, the loss of Abadan from the point of view of this country has been a very good reason for approaching this tax in a more co-operative and understanding spirit than has been shown hitherto.

The last thing I wish to say on the subject of oil—without twisting the tails of right hon. Gentlemen opposite any further on the subject of Abadan—is that any marginal placing of our purchases over and above what we are getting now, were consumption to have risen, would have fallen 100 per cent. on our foreign exchange. Our purchases from Europe are paid for 80 per cent. in gold at the present time and so there is surely a reason, on the foreign exchange front, for taking care about oil.

In relation to the home front, hon. Members opposite have criticised the tax for various reasons connected with the cost of living and the raising of manufacturing costs. For private car users the increase will raise the cost per mile of the small car, doing about 30 miles per gallon, by ¼d. per mile. The larger car, doing 20 miles per gallon, will cost three-eights of a penny more per mile. For commercial users I calculate—and I have always tried to be fair in giving the Committee the figures—that the cost will be increased by about 3½ or 4 per cent.

It has been said that that will automatically mean a rise in fares. I do not believe that. I know that extra costs sill be incurred because the fuel will cost more; but I am very glad to see that the Chairman of the Road Haulage Executive has announced that the Executive will try to keep the position as stable as possible and it is not intended to increase the rates, at any rate for the time being. That is a very statesmanlike approach by the Executive, despite the burden which I have undoubtedly put upon their shoulders. That is the right spirit in which to take this rise.

When one reflects that, on the average, public service vehicles do about 10 miles to the gallon, so that the incidence of the increased duty works out on an average at ¾d. per vehicle per mile, I do not believe that it necessarily must mean a rise in fares or a rise in charges at the present time. At any rate, whether or not it does, I welcome the statesmanlike spirit in which the Executive have approached this matter and I hope we can all approach it in that spirit.

Mr. Jay

The representatives of the bus organisations, on the other hand, have said that it will definitely mean a rise in fares.

Mr. Butler

I think that is so, but I have not that particular reference with me.

The right hon. Gentleman raised the question whether the cost of petrol at home was greater than the cost abroad. I notice that last year he said that foreign costs were greater than ours, and in speaking this year he said he thought they were less. I have obtained the figures for the capitals because I do not think it is fair to take the figures in a difficult constituency like that of the hon. Member for Orkney and Shetland (Mr. Grimond), where the cost is higher—and I sympathise with the hon. Member's difficulties and I feel sure that, on resuming my seat I shall have his support.

7.30 p.m.

The figures in the capitals are these. In London, it is approximately 4s. 2¾d. a gallon. In Brussels, it costs approximately 4s. 4d. a gallon, namely, more; in Berne, 4s. 8d. a gallon; in Paris, 5s. 7d. a gallon; in Rome, 6s. 8d. a gallon; in Oslo, 4s. 2d. a gallon—approximately the same; and in Helsinki, 4s. 11d. a gallon. The only capital where the cost is appreciably lower is Stockholm where the cost is 3s. 4d. a gallon. That is some indication that, compared with a great many capitals, our costs are still lower, despite this increase in the Petrol Duty.

In the case of the United States, of course, the cost is very much less. I calculate that it comes out, at most, at 2s. 2d. a gallon. In the case of some of our Commonwealth friends overseas, like New Zealand, the cost is definitely less. For example, in Canada it would be 3s. 3d. a gallon and in Australia I calculate that it would be about 3s. 4½d. a gallon. In comparison with the figures for many other capital cities this, therefore, is not a tax the incidence of which need be feared as being dangerously heavy.

I will refer only in passing to the tax on paint and other constituents, which will no doubt be raised in later Amendments, and I will conclude by saying that this tax is an integral part of the general scheme of the Budget—a scheme which has commended itself to the country as a whole. This tax was conceived in a spirit of national duty because I thought it had some reference to the external position, as I have tried to show it has. I hope that the human effects of this tax, which is one of the very few taxes I increased in my Budget, will not have the bad human, industrial or other results which hon. Members fear.

Mr. Gaitskell

I am glad that the Chancellor of the Exchequer is pleased with the progress which we have made and with the temper of the debate so far. I can assure him that so long as he gives us adequate time to discuss Amendments, and makes reasonable concessions from time to time, the temper will continue to be very good. I will also say that his proposal, as I understand it, that the Schedule to the Purchase Tax Clauses should be taken with the Clauses, is not one to which we see any objection. I must, however, point out to him that this matter of the Purchase Tax is one in which I think hon. Members in all parts of the Committee are closely interested, and I hope he will be prepared to give us plenty of time to discuss the rather large number of Amendments on the subject.

The reception by the right hon. Gentleman's own supporters of this tax has not been exactly enthusiastic. Of course, they were in a difficult position. Either they had to admit that they were wrong in what they said last year or they were more or less obliged to attack the Government this evening. Some of them tried to find a third way out by gymnastic contortions in which I do not think they were very successful.

It has been said that we should not be bothered with quotations from what was said last year and that, after all, it is rather a sterile business; but I do not share that view. I think it would make things far too easy for right hon. Gentlemen if they were never to be quoted in the next year, or the year after if it comes to that—and I say that meaning all sides of the Committee. It may be that hon. Members who sit on the back benches opposite can say, "Well, after all, we may feel bound to support the Chancellor of the Exchequer but we were not responsible for this tax; there is some excuse for us." But I do not think that can be put forward as an excuse by right hon. Gentlemen sitting on the Front Bench.

I do not want to go in for a long list of quotations, but I think I am entitled to a small ration here, and I propose to quote only three right hon. Gentlemen—all of them very important Members of the Government. The first is the present Secretary of State for the Colonies. Nobody can say that he was an unimportant back bencher. He led for the Conservative Party when they were the Opposition. It was even rumoured that he might become Chancellor of the Exchequer. In these circumstances it is perhaps as well for him that he did not. Nevertheless, we might have a look at what he said about this tax—and this was in 1950 when we were putting it up from only 9d. to 1s. 6d. instead of to the half-a-crown which it has now reached. He said: there are massive trade reasons which make this duty thoroughly unsound. It will raise the cost of production and the cost of distribution, for example, by increasing fares all over the country and by making the transport of components within the various assembly plants in industry more expensive. A little later he said, and nobody will disagree with him: Only by lower costs are we going to maintain even our present standard of living and break into new export markets. The exhortations are so familiar that I need hardly repeat them. It is only when it comes to action that these exhortations are seen to be mere words. They are mere lip-service to an idea."—[OFFICIAL REPORT, 14th June, 1950; Vol. 476, c. 228–229.]

Mr. Osborne

That is still true.

Mr. Gaitskell

If so, it is a little difficult for the right hon. Gentleman to reconcile it with his position of Secretary of State in this Government.

I come to a right hon. Gentleman who must, I imagine, have been very much concerned with the decision to impose this tax—the President of the Board of Trade. It is true that he did not sit all the time, or indeed most of the time, on the Front Bench when the present Government were in Opposition. Nevertheless, he took a prominent part in debates on transport. It may be that he had the idea that he might become Minister of Transport, even if he did not know he was going to be President of the Board of Trade. What did he say? He is very flamboyant. He said: We believe that the whole of this tax is unnecessary, is vicious, and is calculated to do all the things which the Chancellor, if he was a wise one, would not at present be attempting to do."—[OFFICIAL REPORT, 14th June, 1950; Vol. 476, c. 269.] "Vicious" is a word which I notice hon. Members opposite were very fond of using in those debates, although they have not gone as far as that this afternoon. The whole tone of their speeches has been a little muted and altogether in striking contrast to what they said last year.

I come to one other quotation, this time from the present Leader of the House. In the debate which we had last year he was leading for the Opposition, too. There could be no possible excuse that this was just an individual point of view; he was speaking for the Conservative Party at that time and his speech struck me, as I read it through, as a remarkably effective one which will well repay further examination. I cannot quote all of it, but I should like to take one passage in which he said: Surely, the whole idea is that one should move goods and people about this country as cheaply as possible, and not use this industry as a source of revenue. He went on to say—and this is particularly interesting: I know that the right hon. Gentleman argued before, 'Oh, yes, there always was a petrol tax.' That is true. I concede that argument, but it does not follow that we all approved of it by any manner of means. I thought that was rather a nasty crack at the present Prime Minister who brought it in. He went on to say: There is a very big difference in the considerations which apply if we have a small tax and if we have a high tax. A very small tax in a period like that when it was originally put on, when there were great reserves of taxable capacity"— and we remember that phrase "reserves of taxable capacity"; it was used a good many times in our debates— is quite different from putting on within 12 months 1s. 1½ a gallon when we have no reserves. The right hon. Gentleman ended his speech by saying: But we had 9d. last year … and it is the cumulative effect that matters. He ended his speech: I do not like using the old proverb about the last straw, but the right hon. Gentleman must be sure that there is a time rapidly coming when the last straw is going to make all the difference, and perhaps he is getting to that stage now."—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 824–6.] Well, he has well passed it by now.

I feel that we are entitled to draw attention to these statements by leading members of the Government when they were in Opposition, because it really is a bad thing for our democracy if party leaders get into the habit of saying things in opposition and then completely reversing them when they get into the Government. I can well understand that hon. Members are waiting to hear what I am going to say this time, but there is a really important difference here.

Here are the members of the Government now supporting a higher tax when they said all those things I have quoted about a much lower tax. It is another thing, of course, for us to be accused of opposing a higher tax, and being told we are inconsistent in that. I think myself that we are perfectly justified in taking this line, because, after all, we admit, we agree, that last year the increase in taxation was justified. But that does not mean that we must accept any increase in the same tax the Government choose to put on in future years. That would be an absurd argument. What is really quite untenable is opposition which objects to a lower tax and then supports a higher one, and it is on this ground that we think this inconsistency really is something that must be exposed.

I do not know whether the right hon. Gentlemen now think they were wrong when they made all those remarks, or whether they still admit that those consequences follow. I have been asking myself how they could possibly resolve this difficulty. Of course, one obvious matter for inquiry would be whether there had been any change in the external circumstances which would, perhaps, make rather less important the adverse—the devastating—consequences which they forecast last year and the year before. Let us look at that.

There have been, I think, three major criticisms that have been made of this tax in the past—first, that it was damaging to our export trade; second—and this point, rather curiously, has not been referred to at all, I think, in the debate today—that it would be damaging in particular to the production of the right sort of motor car for export purposes; and third, that it was increasing the cost of living and adding to inflation.

Well, can we really say that we do not need to worry about the export market? Is it not really the case now that we have a tougher job, because we have to increase our exports to the dollar area, than we had in the past, and, indeed, that the whole atmosphere in which our exporters have to operate is now, unfortunately, much less favourable than it was a year or two years ago? I think that that is undoubtedly the case. We have, in other words, got to face fiercer competition now than was the case in the past.

It is sometimes argued—hon. Members have argued it here—that it would not have been a bad thing in the past had we charged more for our exports. It is, I think, true of some industries and untrue of others, but what is, I think, perfectly clear is that it is not nearly so much the case today as it was last year.

Then, as to car design. I am bound to tell the Committee that when we were considering the Budget last year we naturally took into account the possible consequences of an increase in the Petrol Duty, and we were concerned lest the increase, or any substantial increase, would have an adverse effect on that particular point. I remember the hon. Member for Edgbaston (Sir P. Bennett), who is now the Parliamentary Secretary to the Ministry of Labour, making a very powerful speech about this then—or the year before. There is a real danger there that if, in fact, the price of petrol becomes as high as this it will be extremely difficult for manufacturers to concentrate on producing the rather medium and larger sized cars which, we know, do best in the export market.

7.45 p.m.

As for the cost of living, I do not imagine that anybody on those benches opposite is going to say that that is a less serious problem today. It is true, of course, that the Government have more or less given up attempting to do anything about it. Indeed, by cutting the food subsidies they have, of course, deliberately increased it. But still it remains as true as it was then—indeed, truer—that an increase in the Petrol Duty, and the increase in fares which is bound to follow—whatever the right hon. Gentleman may hope for in the case of freight charges for the time being, an increase in bus fares is certain to follow—are all increasing the cost of living, and are bound to give a further fillip to the whole inflationary spiral.

Here let me interpose this. I do not think that the right hon. Gentleman's answer on agriculture really met our point. The point surely is this, that by taking into account the increase in the Petrol Duty in the review of farm prices the right hon. Gentleman is putting the increase in petrol directly on the food prices. That is, in fact, what he is doing. Whereas, of course, if he had offered the farmers some concession as is suggested in the Amendment, they would not have made such a large increase in food prices.

I referred just now to the problem of fares, and many of my hon. and right hon. Friends, too, have spoken on that matter. I should like to ask the Chancellor, if he can, even at this hour, to say something in reply to a question I want to put to him about something that appeared in the Press recently—in the "News Chronicle" on 29th April. There was a story on the front page that the Government intend not only to impose this increase in the Petrol Duty but also to oblige the road haulage business to pay a further charge or levy.

Now, this is really a matter of considerable importance to those engaged in the business, and it really is going a bit far, if there is to be another levy on top of the Petrol Tax—the increase in which has been defended by some hon. Members opposite, rather curiously, with exactly the opposite arguments to those they used over here, as being something which has helped to get the balance right between road and rail. What I want to know is whether there is anything in this story relating to the Government's transport policy that there is to be a further levy on road haulage. Would the Chancellor like to say anything on that, because I know, in fact, there is great anxiety about it? Indeed, it is of interest to those concerned and to the consuming public as a whole that their minds should be put to rest at the earliest possible moment. Would he care to deny the story?

Mr. R. A. Butler

I have nothing to say, except that the Committee—and the House at a later date—must await the publication of the Government's policy.

Mr. Gaitskell

So it means really that on top of the Petrol Duty there is to be a further levy on road haulage and that the consuming public must pay something more in addition?

Mr. Butler

I have told the right hon. Gentleman and the Committee that the Committee—and the House at a later date—must await the publication of the Government's policy and get the facts. I can make no further observation now.

Mr. Gaitskell

All I can say is that that answer is very, very far from reassuring anybody.

I turn to two arguments which the Government have put in defence of this tax. First, the argument based on Abadan. I am bound to say that I thought that the right hon. Gentleman was defending his Budget and this particular tax on rather different lines from those with which he defended it in the Budget itself, because what he said—and it was before the words quoted by the hon. Member for Basingstoke (Mr. Donner)—was this: I now come to some major proposals. While budgeting for a large surplus I yet wish to finance certain important changes which the Government conceive to be in the interest"— and so on. In other words, it is quite obvious that what he had in mind in his Petrol Duty in the Budget was revision in the Income Tax, and so on. At a later stage it is only after that that he then says: I have only one tax increase to propose and that is on oil."—[OFFICIAL REPORT, 11th March, 1952; Vol. 497, c. 1296.] And then speaks about the balance of payments difficulties, but as far as he was concerned the principle reason was not the loss of Abadan. It was, of course, part of his general Budget design, and we are not concerned to discuss that in any detail. Indeed, we could not this evening, but it is obvious that that was the main reason for it and not the loss of Abadan at all.

If it were the case that the right hon. Gentleman brought this tax in simply to reduce consumption, then the revenue he is obtaining on it is a kind of accidental by-product. If that is the case, there is even less justification for the cuts in food subsidies and other social services that were made.

We are not yet clear whether the Chancellor expects that consumption will be reduced. Many hon. Members on both sides of the Committee take the view that it would not, in fact, reduce consumption except to a tiny extent, and even the argument about the dollar content was not to my mind entirely convincing. For some time there has been a dollar content in our oil here, and there has been a substantial dollar content in what one might call the marginal oil—the last 100 tons of oil which we have to buy. I think I am right in saying that that was the case before the loss of Abadan.

As I say, one really gets no clear idea as to how much is saved and as to what this means in terms of dollars. None of us would for one moment question the importance of saving dollars, and in the absence of that and in the light of what the right hon. Gentleman has said, I think the talk about Abadan is a kind of a lifebelt which the right hon. Gentleman and hon. Gentlemen opposite clutch at in order to save themselves from their appalling contradictions.

The other argument is about the Budget generally. The right hon. Gentleman cannot claim that this year it was necessary to impose this duty in order to raise revenue for defence purposes. In fact, the Budget gave away some £24 million, and there was no increase in the total revenue at all except what came in automatically from the existing taxes.

Our view on this has been very well stated by my right hon. Friend the Member for Battersea, North (Mr. Jay). We say that if, in fact, the Chancellor wanted this in order to make certain other concessions, in the first place he certainly cannot argue that this was done in order to increase the social service benefits, because when I proposed during the Budget debate that that might be done and these two things matched together—the increase in the Petrol Duty and the social services—I was told at once that no such thing could be done and that it was quite unfair. So that one goes. It is part and parcel of this general scheme of increases in indirect taxation and increases in food prices in order to finance reductions in Income Tax.

We said—and I repeat what my right hon. Friend said—that we do not believe that the £70 million a year—and the Chancellor certainly has not denied that it will amount to this figure—that will have to be paid on the National Debt as a

result of the rise in interest rates—[Laughter.] Somebody is laughing, but I do not think it is a laughing matter at all. What we say is that it was not necessary to impose the burden on the Exchequer in order to get the financial consequences which the Chancellor was aiming at.

A further point is that when we analyse these Income Tax concessions we find—and this figure comes from the Chancellor himself—that £50 million of them goes to those with £1,000 a year or more, and we say that this concession to people who are already pretty well off at the expense of the users of transport is quite unjustified. The ill effects of this tax are not in dispute. We are not convinced by the case made out for it, and we shall, therefore, have great pleasure in going into the Division Lobby in support of our Amendment.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 283; Noes, 268.

Division No. 107.]	AYES	[7.53 p.m.
Aitken, W. T.	Butcher, H. W.	Fletcher-Cooke, C.
Allan, R. A. (Paddington, S.)	Butler, Rt. Hon. R. A. (Saffron Walden)	Fort, R.
Alport, C. J. M.	Carr, Robert (Mitcham)	Foster, John
Amery, Julian (Preston, N.)	Carson, Hon. E.	Fraser, Sir Ian (Morecambe & Lansdale)
Amory, Heathcoat (Tiverton)	Cary, Sir Robert	Fyfe, Rt. Hon. Sir David Maxwell
Ansthruther-Gray, Major W. J.	Channon, H.	Gage, C. H.
Arbuthnot, John	Clarke, Col. Ralph (East Grinstead)	Galbraith, Cmdr. T. D. (Pollok)
Ashton, H. (Chelmsford)	Clarke, Brig. Terence (Portsmouth, W.)	Gammans, L. D.
Assheton, Rt. Hon. R. (Blackburn, W.)	Clyde, Rt. Hon. J. L.	Garner-Evans, E. H.
Astor, Hon. J. J. (Plymouth, Sutton)	Cole, Norman	Godber, J. B.
Astor, Hon. W. W. (Bucks, Wycombe)	Colegate, W. A.	Gomme-Duncan, Col. A.
Baker, P. A. D.	Conant, Maj. R. J. E.	Gough, C. F. H.
Baldock, Lt.-Cmdr. J. M.	Cooper, Sqn. Ldr. Albert	Gower, H. R.
Baldwin, A. E.	Cooper-Key, E. M.	Graham, Sir Fergus
Banks, Col. C.	Craddock, Beresford (Spelthorne)	Gridley, Sir Arnold
Barber, A. P. L.	Cranborne, Viscount	Grimston, Hon. John (St. Albans)
Barlow, Sir John	Crookshank, Capt. Rt. Hon. H. F. C.	Grimston, Sir Robert (Westbury)
Baxter, A. B.	Crosthwaite-Eyre, Col. O. E.	Harden, J. R. E.
Beach, Maj. Hicks	Crouch, R. F.	Hare, Hon. J. H.
Bell, Philip (Bolton, E.)	Crowder, John E. (Finchley)	Harris, Frederic (Croydon, N.)
Bell, Ronald (Bucks, S.)	Crowder, Petre (Ruislip—Northwood)	Harris, Reader (Heston)
Bennett, F. M. (Reading, N.)	Darling, Sir William (Edinburgh, S.)	Harrison, Col. J. H. (Eye)
Bennett, Dr. Reginald (Gosport)	Davidson, Viscountess	Harvey, Air Cdre. A. V. (Macclesfield)
Bennett, William (Woodside)	Deedes, W. F.	Harvey, Ian (Harrow, E.)
Bevins, J. R. (Toxteth)	Digby, S. Wingfield	Harvie-Watt, Sir George
Birch, Nigel	Dodds-Parker, A. D.	Hay, John
Bishop, F. P.	Donaldson, Cmdr. C. E. McA.	Head, Rt. Hon. A. H.
Black, C. W.	Donner, P. W.	Heald, Sir Lionel
Boothby, R. J. G.	Doughty, C. J. A.	Heath, Edward
Bossom, A. C.	Douglas-Hamilton, Lord Malcolm	Higgs, J. M. C.
Boyd-Carpenter, J. A.	Drayson, G. B.	Hill, Dr. Charles (Luton)
Boyle, Sir Edward	Dugdale, Maj. Rt. Hn. Sir T. (Richmond)	Hill, Mrs. E. (Wythenshawe)
Braine, B. R.	Duncan, Capt. J. A. L.	Hirst, Geoffrey
Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)	Duthie, W. S.	Holland-Martin, C. J.
Brooke, Henry (Hampstead)	Eden, Rt. Hon. A.	Hollis, M. C.
Brooman-White, R. C.	Elliot, Rt. Hon. W. E.	Holmes, Sir Stanley (Harwich)
Browne, Jack (Govan)	Erroll, F. J.	Hopkinson, Henry
Buchan-Hepburn, Rt. Hon. P. G. T.	Fell, A.	Hornsby-Smith, Miss M. P.
Bullard, D. G.	Finley, Graeme	Horobin, I. M.
Bullock, Capt. M.	Fisher, Nigel	Horsbrugh, Rt. Hon. Florence
Bullus, Wing Commander E. E.	Fleetwood-Hesketh, R. F.	Howard, Gerald (Cambridgeshire)
Burden, F. F. A.	Fletcher, Walter (Bury)	Howard, Greville (St. Ives)
Hudson, Sir Austin (Lewisham, N.)	Mellor, Sir John	Smithers, Peter (Winchester)
Hudson, W. R. A. (Hull, N.)	Molson, A. H. E.	Smithers, Sir Waldron (Orpington)
Hurd, A. R.	Moore, Lt.-Col, Sir Thomas	Smyth, Brig. J. G. (Norwood)
Hutchison, Lt.-Com. Clark (E'b'rgh W.)	Morrison, John (Salisbury)	Snadden, W. McN.
Hyde, Lt.-Col. H. M.	Mott-Radclyffe, C. E.	Soames, Capt. C.
Hylton-Foster, H. B. H.	Nabarro, G. D. N.	Spearman, A. C. M.
Jenkins, R. C. D. (Dulwich)	Nicholls, Harmar	Speir, R. M.
Jennings, R.	Nicholson, Godfrey (Farnham)	Spence, H. R. (Aberdeenshire, W.)
Johnson, Eric (Blackley)	Nicolson, Nigel (Bournemouth, E.)	Spens, Sir Patrick (Kensington, S.)
Jones, A. (Hall Green)	Nield, Basil (Chester)	Stanley, Capt. Hon. Richard
Joynson-Hicks, Hon. L. W.	Noble, Cmdr. A. H. P.	Stevens, G. P.
Kaberry, D.	Nugent, G. R. H.	Steward, W. A. (Woolwich, W.)
Keeling, Sir Edward	Odey, G. W.	Stewart, Henderson (Fife, E.)
Kerr, H. W. (Cambridge)	O'Neill, Rt. Hon. Sir H. (Antrim, N.)	Stoddart-Scott, Col. M.
Lambert, Hon. C.	Orr, Capt. L. P. S.	Storey, S.
Lambton, Viscount	Orr-Ewing, Charles Ian (Hendon, N.)	Strauss, Henry (Norwich, S.)
Lancaster, Col. C. G.	Orr-Ewing, Ian L. (Weston-super-Mare)	Stuart, Rt. Hon. James (Moray)
Law, Rt. Hon. R. K.	Osborne, C.	Studholme, H. G.
Leather, E. H. C.	Partridge, E.	Summers, G. S.
Legge-Bourke, Maj. E. A. H.	Peaks, Rt. Hon. O.	Sutcliffe, H.
Legh, P. R. (Petersfield)	Perkins, W. R. D.	Taylor, William (Bradford, N.)
Lennox-Boyd, Rt. Hon. A. T.	Peto, Brig. C. H. M.	Teeling, W.
Lindsay, Martin	Peyton, J. W. W.	Thomas, Rt. Hon. J. P. L. (Hereford)
Linstead, H. N.	Pickthorn, K. W. M.	Thomas, P. J. M. (Conway)
Lloyd, Rt. Hon. G. (King's Norton)	Pilkington, Capt. R. A.	Thompson, Kenneth (Walton)
Lloyd, Maj. Guy (Renfrew, E.)	Pitman, I. J.	Thompson, Lt.-Cdr. R. (Croydon, W.)
Lloyd, Rt. Hon. Selwyn (Wirral)	Powell, J. Enoch	Thorneycroft, R. Hn. Peter (Monmouth)
Lockwood, Lt.-Col. J. C.	Price, Henry (Lewisham, W.)	Thornton-Kemsley, Col. C. N.
Longden, Gilbert (Herts, S.W.)	Prior-Palmer, Brig. O. L.	Tilney, John
Low, A. R. W.	Profumo, J. D.	Turner, H. F. L.
Lucas, Sir Jocelyn (Portsmouth, S.)	Raikes, H. V.	Turton, R. H.
Lucas, P. B. (Brantford)	Rayner, Brig. R.	Vane, W. M. F.
Lucas-Tooth, Eir Hugh	Redmayne, E.	Vaughan-Morgan, J. K.
McAdden, S. J.	Remnant, Hon. P.	Vosper, D. F.
McCorquodale, Rt. Hon. M. S.	Renton, D. L. M.	Wakefield, Edward (Derbyshire, W.)
Macdonald, Sir Peter (I. of Wight)	Roberts, Peter (Heeley)	Wakefield, Sir Wavell (Marylebone)
Mackeson, Brig. H. R.	Robertson, Sir David	Walker-Smith, D. C.
McKibbin, A. J.	Robinson, Roland (Blackpool, S.)	Ward, Hon. George (Worcester)
McKie, J. H. (Galloway)	Robson-Brown, W.	Ward, Miss I. (Tynemouth)
MacLeod, Iain (Enfield, W.)	Rodgers, John (Sevenoaks)	Waterhouse, Capt. Rt. Hon. C.
Macmillan, Rt. Hon. Harold (Bromley)	Roper, Sir Harold	Watkinson, H. A.
Macpherson, Maj. Niall (Dumfries)	Ropner, Col. Sir Leonard	Webbe, Sir H. (London & Westminster)
Maitland, Comdr. J. F. W. (Horncastle)	Russell, R. S.	Wellwood, W.
Maitland, Patrick (Lanark)	Ryder, Capt. R. E. D.	White, Baker (Canterbury)
Manningham-Buller, Sir R. E.	Salter, Rt. Hon. Sir Athur	Williams, Rt. Hon. Charles (Torquay)
Markham, Major S. F.	Sandys, Rt. Hon. D.	Williams, Gerald (Tonbridge)
Marlowe, A. A. H.	Savory, Prof. Sir Douglas	Williams, Sir Herbert (Croydon, E.)
Marshall, Douglas (Bodmin)	Schofield, Lt.-Col. W. (Rochdale)	Wills, G.
Marshall, Sidney (Sutton)	Scott, R. Donald	Wilson, Geoffrey (Truro)
Maude, Angus	Scott-Miller, Cmdr. R.	Wood, Hon. R.
Maudling, R.	Shepherd, William	York, C.
Maydon, Lt.-Comdr. S. L. C.	Simon, J. E. S. (Middlesbrough, W.)
Medlicott, Brig. F.	Smiles, Lt.-Col. Sir Walter	TELLERS FOR THE AYES:
		Mr. Drewe and Mr. Oakshott
NOES
Acland, Sir Richard	Brown, Rt. Hon. George (Belper)	Deer, G.
Adams, Richard	Brown, Thomas (Ince)	Delargy, H. J.
Albu, A. H.	Burke, W. A.	Dodds, N. N.
Anderson, Frank (Whitehaven)	Burton, Miss F. E.	Donnelly, D. L.
Attlee, Rt. Hon. C. R.	Butler, Herbert (Hackney, S.)	Driberg, T. E. N.
Awbery, S. S.	Callaghan, L. J.	Dugdale, Rt. Hon. John (W. Bromwich)
Ayles, W. H.	Carmichael, J.	Ede, Rt. Hon. J. C.
Bacon, Miss Alice	Castle, Mrs. B. A.	Edelman, M.
Baird, J.	Champion, A. J.	Edwards, John (Brighouse)
Balfour, A.	Chapman, W. D.	Edwards, Rt. Hon. Ness (Caerphilly)
Barnes, Rt. Hon. A J.	Chetwynd, G. R.	Edwards, W. J. (Stepney)
Bartley, P.	Clunie, J.	Evans, Albert (Islington, S.W.)
Bellenger, Rt. Hon. F. J.	Cocks, F. S.	Evans, Edward (Lowestoft)
Bence, C. R.	Coldrick, W.	Evans, Stanley (Wednesbury)
Benn, Wedgwood	Collick, P. H.	Ewart, R.
Benson, G.	Cook, T. F.	Fernyhough, E.
Beswick, F.	Corbet, Mrs. Freda	Field, W. J.
Bevan, Rt. Hon. A. (Ebbw Vale)	Cove, W. G.	Fienburgh, W.
Bing, G. H. C.	Craddock, George (Bradford, S.)	Finch, H. J.
Blackburn, F.	Crosland, C. A. R.	Fletcher, Eric (Islington, E.)
Blyton, W. R.	Crossman, R. H. S.	Follick, M.
Boardman, H.	Cullen, Mrs. A.	Foot, M. M.
Bottomley, Rt. Hon. A G.	Daines, P.	Forman, J. C.
Bowden, H. W.	Dalton, Rt. Hon. H.	Fraser, Thomas (Hamilton)
Bowen, E. R.	Darling, George (Hillsborough)	Freeman, John (Watford)
Braddock, Mrs. Elizabeth	Davies, A. Edward (Stoke, N.)	Freeman, Peter (Newport)
Brockway, A. F.	Davies, Ernest (Enfield, E.)	Gaitskell, Rt. Hon. H. T. N.
Brook, Dryden (Halifax)	Davies, Harold (Leek)	Gibson, C. W.
Broughton, Dr. A. D. D.	Davies, Stephen (Merthyr)	Glanville, James

Gooch, E. G.	McGhee, H. G.	Shawcross, Rt. Hon. Sir Hartley
Gordon-Walker, Rt. Hon. P. C.	McInnes, J.	Shinwell, Rt. Hon. E.
Greenwood, Anthony (Rossendale)	McKay, John (Wallsend)	Short, E. W.
Greenwood, Rt. Hon. Arthur (Wakefield)	McLeavy, F.	Shurmer, P. L. E.
Grenfell, Rt. Hon. D. R.	McNeil, Rt. Hon. H.	Silverman, Julius (Erdington)
Grey, C. F.	MacPherson, Malcom (Stirling)	Simmons, C. J. (Brierley Hill)
Griffiths, David (Rother Valley)	Mainwaring, W. H.	Slater, J.
Griffiths, Rt. Hon. James (Llanelly)	Mallalieu, E. L. (Brigg)	Smith, Norman (Nottingham, S.)
Grimond, J.	Mallalieu, J. P. W. (Huddersfield, E.)	Sorensen, R. W.
Hale, Leslie (Oldham, W.)	Manuel, A. C.	Soskice, Rt. Hon. Sir Frank
Hall, Rt. Hon. Glenvil (Colne Valley)	Marquand, Rt. Hon. H. A.	Sparks, J. A.
Hall, John (Gateshead, W.)	Mayhew, C. P.	Steele, T.
Hamilton, W. W.	Mellish, R. J.	Stokes, Rt. Hon. R. R.
Hardy, E. A.	Messer, F.	Strachey, Rt. Hon. J.
Hargreaves, A.	Mikardo, Ian	Strauss, Rt. Hon. George (Vauxhall)
Harrison, J. (Nottingham, E.)	Mitchison, G. R.	Summerskill, Rt. Hon. E.
Hastings, S.	Monslow, W.	Swingler, S. T.
Hayman, F. H.	Moody, A. S.	Sylvester, G. O.
Healey, Denis (Leeds, S.E.)	Morgan, Dr. H. B. W.	Taylor, Bernard (Mansfield)
Henderson, Rt. Hon. A (Rowley Regis)	Morley, R.	Taylor, John (West Lothian)
Herbison, Miss M.	Morris, Percy (Swansea, W.)	Taylor, Rt. Hon. Robert (Morpeth)
Hewitson, Capt. M.	Morrison, Rt. Hon. H. (Lewisham, S.)	Thomas, David (Aberdare)
Hobson, C. R.	Moyle, A.	Thomas, George (Cardiff)
Holman, P.	Mulley, F. W.	Thomas, Iorwerth (Rhondda, W.)
Holmes, Horace (Hemsworth)	Murray, J. D.	Thomas, Ivor Owen (Wrekin)
Holt, A. F.	Neal, Harold (Bolsover)	Thorneycroft, Harry (Clayton)
Houghton, Douglas	Noel-Baker, Rt. Hon. P. J.	Thurtle, Ernest
Hoy, J. H.	O'Brien, T.	Tomney, F.
Hubbard, T. F.	Oldfield, W. H.	Turner-Samuels, M.
Hudson, James (Ealing, N.)	Oliver, G. H.	Ungoed-Thomas, Sir Lynn
Hughes, Cledwyn (Anglesey)	Orbach, M.	Usborne, H. C.
Hughes, Emrys (S. Ayrshire)	Oswald, T.	Viant, S. P.
Hynd, H. (Accrington)	Padley, W. E.	Wade, D. W.
Hynd, J. B. (Attercliffe)	Paling, Rt. Hon. W. (Dearne Valley)	Wallace, H. W.
Irvine, A. J. (Edge Hill)	Paling, Will T. (Dewsbury)	Watkins, T. E.
Irving, W. J. (Wood Green)	Pannell, Charles	Webb, Rt. Hon. M. (Bradford, C.)
Isaacs, Rt. Hon. G. A.	Pargiter, G. A.	Weitzman, D.
Janner, B.	Parker, J.	Wells, Percy (Faversham)
Jay, Rt. Hon. D. P. T.	Paton, J.	Wells, William (Walsall)
Jeger, George (Goole)	Pearson, A.	West, D. G.
Jeger, Dr. Santo (St. Pancras, S.)	Peart, T. F.	Wheatley, Rt. Hon. John
Jenkins, R. H. (Stechford)	Plummer, Sir Leslie	White, Mrs. Eirene (E. Flint)
Johnson, James (Rugby)	Porter, G.	White, Henry (Derbyshire, N.E.)
Johnston, Douglas (Paisley)	Price, Joseph T. (Westhoughton)	Whiteley, Rt. Hon. W.
Jones, David (Hartlepool)	Price, Philips (Gloucestershire, W.)	Wigg, George
Jones, Frederick Elwyn (West Ham, S.)	Proctor, W. T.	Wilcock, Group Capt. C. A. B.
Jones, Jack (Rotherham)	Pryde, D. J.	Wilkins, W. A.
Jones, T. W. (Merioneth)	Pursey, Cmdr. H.	Willey, Frederick (Sunderland, N.)
Keenan, W.	Reeves, J.	Willey, Octavius (Cleveland)
Kenyon, C.	Reid, Thomas (Swindon)	Williams, David (Neath)
Key, Rt. Hon. C. W.	Reid, William (Camlachie)	Williams, Rev. Llywelyn (Abertillery)
King, Dr. H. M.	Rhodes, H.	Williams, Ronald (Wigan)
Kinley, J.	Richards, R.	Williams, W. R. (Droylsden)
Lee, Frederick (Newton)	Robens, Rt. Hon. A.	Williams, W. T. (Hammersmith, S.)
Lee, Miss Jennie (Cannock)	Roberts, Albert (Normanton)	Winterbottom, Ian (Nottingham, C.)
Lever, Harold (Cheetham)	Roberts, Goronwy (Caernarvonshire)	Winterbottom, Richard (Brightside)
Lever, Leslie (Ardwick)	Rogers, George (Kensington, N.)	Woodburn, Rt. Hon. A.
Lewis, Arthur	Ross, William	Yates, V. F.
Lindgren, G. S.	Royle, C.	Younger, Rt. Hon. K.
Logan, D. G.	Schofield, S. (Barnsley)
MacColl, J. E.	Shackleton, E. A. A.	TELLERS FOR THE NOES:
		Mr. Hannan and Mr. Arthur Allen.

Mr. Simmons

I beg to move, in page 2, line 6, at the end, to insert: except that in the case of hydrocarbon oils used for the propulsion of invalid chairs driven by disabled persons the rate of duty shall be one shilling and tenpence halfpenny a gallon. I understand that with this Amendment three other Amendments which cover motor vehicles provided by the Ministry of Pensions are being considered. It relates to the invalid chairs which are known as motor-propelled tricycles, and which are used by the severely disabled, and it proposes that they should be exempted from this increase in the Petrol Duty.

This is a non-controversial issue. The problems of the disabled, and especially of the war disabled, have always been regarded as above party political strife. Therefore, the gusty arguments of the Kidderminster kidder or the Abadan alibi of the other side of the Committee, do not enter into this issue at all. We feel that the Chancellor, unlike his diehard colleague the Minister of Health, is not desirous of taxing cripples, and so I make my plea to him with a certain amount of confidence.

The increase in the Petrol Duty is admitted on all sides to be likely to cause inconvenience. To some people it will mean a sacrifice, but to the crippled and disabled ex-Service man, whose motor-propelled tricycle is the only form of locomotion, it will mean more than inconvenience or sacrifice. It will be a cruel hardship. These vehicles enable cripples to get to and from work when otherwise they would have to suffer enforced idleness. I have seen in the Press today a report of the Remploy factories, giving an indication of the amount of public money which is spent on training and rehabilitating cripples to enable them to become effective units in the industrial machine. If they get their training at those factories, and then are unable to use their motor-propelled tricycles, they are still a dead loss to the community.

The motor-propelled tricycles are of the greatest advantage to those of our disabled who, for many years, have been bedridden or housebound. Hon. Members who have not had the experience of visiting these people cannot comprehend the dread monotony, the drab existence, that they have had to undergo. The coming of the motor-propelled tricycle and of the cars that are given by the Ministry of Pensions, opened out new vistas of life to them. They are beginning to live for the first time since their disability began.

For these people at least it has provided an opportunity to see the world around them and get some enjoyment out of an otherwise drab existence. Many of them are unable to work and have to live on their National Insurance benefits plus any National Assistance to which they may be entitled. This tax increase is the third in a very short time. It is likely to bear heavily upon them.

War pensioners are dealt with in one of the other Amendments. I am dealing with the motor-propelled tricycle at the moment, the users of which are in a specially disadvantageous position. It is not the 100 per cent. disabled man who is using the motor-propelled tricycle. If a man is badly disabled by multiple injuries or double amputation he will be using a car and, because of his 100 per cent. disability, is entitled to higher supplementation. The 75 to 90 per cent. disability man can only qualify for 35s. a week unemployability supplement in lieu of his earnings, and therefore this impost will be very heavy upon him.

It is not an exaggeration to say that for these men and women the Petrol Tax is equivalent to a tax on walking, because a motor-propelled vehicle is a substitute for the use of or the actual limbs they have lost. The remission of this tax would cost the Exchequer very little. In July, 1951, there were in use 6,170 motor-propelled tricycles supplied through the Ministry of Pensions, 1,470 of which went to war pensioners and 4,700 of which were being used by National Health patients.

These vehicles do about 70 miles to the gallon, and assuming the users travel on an average 140 miles a week, that means they use two gallons of petrol a week. I am not a financial expert. I left school when I was 14 years of age and I have never had much need to go in for mathematics, and no money to do it with. In my humble calculation, however, and subject to correction, it would cost the Exchequer well under £20,000. That is a very small price to pay for giving such an amount of happiness.

Successive Ministers of Pensions have found implacable Treasury officials trying to dam the flow of the milk of human kindness which flows naturally from the Ministry of Pensions. I am sure that the Minister himself will be grateful to us for raising this matter tonight because it will help him as much as it will help us, and I am sure that all who are interested in the welfare of ex-Service people will feel the same.

The Chancellor may have made up his mind once about this, but it should not be impossible for us to convince him that he might be bold enough to change his mind on this human problem. He might emulate the Minister of Pensions who, on 18th March, said: I am not convinced that in the present circumstances an increase in the allowance is warranted nor would I be justified in initiating an allowance for war pensioners using motor chairs, which are maintained by the Ministry."—[OFFICIAL REPORT, 18th March, 1952; Vol. 497, c. 196.] 8.15 p.m.

The car allowance which was initiated by a Labour Minister of Pensions early in 1945 at £45 has been twice increased: in April, 1950, to £50 and in April, 1951, to £52 10s. Less than a month after the statement I have quoted the Minister of Pensions was able to come to the House of Commons and emulate his Labour predecessor in office in synchronising with the increase in the Petrol Duty a further increase in the car allowance of £4 10s. to £57.

As I read the Regulations this is not strictly a petrol allowance at all but an allowance for maintenance and repairs. So we are coupling with our demand in respect of tricycles tonight a request that owners of cars supplied by the Ministry of Pensions should have the same concessions as those which go to users of motor-propelled tricycles. Because what was not warranted in March was done in April, and because there is such a strong humanitarian appeal, I suggest that for a mere £20,000 the disabled drivers of motor-propelled tricycles and cars might be granted this concession. I think it will represent about £3 per head per annum.

In the debate just concluded one of my hon. Friends spoke of the reduction in the car tax on the big cars owned by rich people by £10 10s. a year. When we give that amount to some opulent or corpulent company director, can we refuse about £3 or £5 a year to those who have suffered in this way? There could be no evasion or sharp practice. These vehicles are capable of carrying only one passenger. They are distinctive. They cannot be used by anyone but a disabled person.

From personal experience in the Ministry of Pensions of this class of user, I feel that the latest impost is the last straw that will break the camel's back as far as these people are concerned. In saying that, I am risking the ridicule of the Chancellor because he has already ridiculed this argument. I therefore most earnestly appeal to the Financial Secretary to the Treasury, in the absence of the Chancellor, to accept the Amendment.

So strong is this case that, if we could have a free vote in the Committee on it we should carry the Amendment, so overwhelming would be the opinion of hon. Members. If the Chancellor finds that there are administrative difficulties about adjusting the tax, he can adopt the simple expedient of going to the Minister of Pensions and saying, "These people deserve some concession. I give you authority to put in your Estimates this year sufficient to make them a grant of £3 or £5 a year to compensate them for this increase."

Brigadier Christopher Peto (Devon, North)

Before the hon. Gentleman sits down may I ask him a question? He was rather evasive about his arithmetic, but I understood him to say that £57 is the maintenance allowance for a car and that it travels roughly 150 miles a week. [An HON. MEMBER: "One hundred and forty."] The hon. Gentleman said it would use about two gallons a week, which comes to £25 a year approximately.

An Hon. Member

A tricycle.

Mr. Simmons

The hon. and gallant Member is a little confused. He is dealing with cars. I was dealing, in connection with those figures, with a motor-propelled tricycle which does 70 miles to the gallon, and I was basing my calculations on that.

Mr. Basil Nield (City of Chester)

I should like for a brief moment to support the case which has been so convincingly put by the hon. Member for Brierley Hill (Mr. Simmons), who, as we all know, has such wide experience in these matters. His plea is for a tax relief in respect of invalid chairs for disabled persons, an appeal with which, I imagine, every hon. Member will be in full agreement.

There seem to be two substantial grounds upon which we could ask for favourable consideration of this question. The first is that the proposal seeks to help a section of the community which every hon. Member would seek to help. The second is that the loss of revenue involved, as the hon. Member pointed out, is extremely unsubstantial. The public, therefore, would lose but little; the individual would profit considerably if the concession was made.

We all rejoiced when the Ministry of Pensions found it possible to provide these chairs and vehicles, which have made so great a difference to these unfortunate people. Much of the value of that may be lost if there is a danger of their being unable adequately to operate or maintain the vehicles. In these circumstances, I most sincerely trust that some concession, at any rate, will be forthcoming.

Mr. R. J. Mellish (Bermondsey)

I am very glad that the hon. and learned Member for the City of Chester (Mr. Nield) has intervened. He has confirmed the view we all hold that the Financial Secretary to the Treasury must give an extremely good answer if he is to avoid the displeasure of the Committee. Indeed, some of his hon. Friends would find it quite impossible, if we took this matter to a Division, to vote against what we are asking for. The Committee will agree that my hon. Friend the Member for Brierley Hill (Mr. Simmons), who moved the Amendment, is well qualified to ask for some concession to disabled people. He is himself disabled and has the respect of all Members.

The point which needs to be stressed regarding the tricycles is that they have given so much happiness to people who for most of their life have not had happiness. By citing one individual case, I can illustrate the position of many of these people. The case is that of a man who as a child was severely injured in a road accident, and never did a day's work until 1942, because he was just not wanted. No one would, or could, employ him. He had his first job in 1942. Thanks to the Ministry of Labour with their Remploy factories and to the Ministry of Pensions with their tricycles, that man is today employed as regularly as anyone else. He is able to do a fine job of work, and is a credit to all who know him. He now has happiness where previously there was nothing in his life but misery. To that kind of person the additional tax represents something of a burden.

It is useless for the Financial Secretary to profess the best will in the world and all the love and affection, and so on, but to say that the administrative difficulties are so great that our proposal cannot be accepted. No doubt he will tell us the story of people going about with special petrol chits and of the black market in these things. There is, however, a very simple alternative, as my hon. Friend suggested.

A yearly grant could be made through the Ministry of Pensions to help to compensate the disabled for the increase in the tax. It would be an indication that we recognise these people to be in a special category. For one thing, as the Minister of Pensions will agree, most of those who are war pensioners do not get the 100 per cent. pension. They do not, therefore, get the full value, but only a percentage, of the recent increase which has been awarded. On that basis alone, there is a special case for helping these people.

I sincerely hope that we shall not hear the story about administrative difficulties; if such things exist they can be overcome. If we can make a yearly grant and allow the Ministry of Pensions to adjust their estimates, we shall earn the regard of the whole House of Commons.

Sir Ian Fraser (Morecambe and Lonsdale)

I feel sure that the whole Committee, and certainly the ex-Service men concerned, will be grateful to the hon. Member for Brierley Hill (Mr. Simmons) and to his hon. Friends for putting down the Amendment.

It was in the time of the first Government after the war—the Labour Government—that the motor cars were provided, and there went with them a substantial allowance of, I think, £50 a year—

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)

£45.

Sir I. Fraser

—to go some way towards meeting the expense of running the vehicles. In each Budget since then, hon. Members on all sides have joined together to ask the Chancellor of the day to see that the additional burden of petrol tax which fell upon the users of these motor cars was not fully met by this class of user.

The usual formula appears to be that the Minister of Pensions refuses the suggestion when it is put in the form of a Parliamentary Question, that a little later the Chancellor says that he cannot adopt the proposal in that way but will ask the Minister to do it in another way, and that a few weeks later it is done. That practice having been so well established, it did not surprise me when my hon. Friend the Minister of Pensions was able to say only the other day that it was his Ministry's intention to adopt that proposal so far as the motor cars were concerned.

The special plea that we make tonight is that that kind of consideration be now applied to the tricycles. This has been asked for over the past three or four years, and no one was more eloquent in his pleading for it than my hon. Friend the Member for Bridlington (Mr. Wood).

There is no one whose heart is not touched by the sight of the cheerful disabled soldier in his little three-wheeled chair, going to his job or to a football match. If we give him this artificial means of locomotion, then with the rising costs all round we ought to do what we can to make it possible for him to afford it.

Many of these men cannot afford five, six or seven shillings a week. That is why pleas have been made so frequently for raising the amount of the war pension. Certainly the little man in his little chair cannot afford the extra cost which the tax involves, and I hope, therefore, that this time, even if they cannot accept the Amendment, the Government will authorise the Ministry of Pensions to initiate an allowance for these men with their tricycles.

The cost of the proposal, it has been said, would be very small, and the amount of happiness that would be given would be very great. I do not take the rather despondent view of the hon. Member for Bermondsey (Mr. Mellish), who expects my hon. Friend the Financial Secretary to say that he cannot adopt the proposal for this, that and the other reason. I have every reason to hope that this time my hon. Friend will get up and say that he will accept it. If so, I for my part will be prepared to thank hon. Gentlemen opposite for having raised the matter, but especially—and I am sure the whole Committee agrees with me—will I thank my hon. Friend the Member for Bridlington, who in particular raised this matter year after year during the past three or four years.

8.30 p.m.

Mr. Ralph Morley (Southampton, Itchen)

I am very glad to support the eloquent appeal made by my hon. Friend the Member for Brierley Hill (Mr. Simmons) that some relief and assistance might be given to the users of invalid chairs.

I think that two of the best things the Labour Government of 1945–50 did were first, to institute the Remploy factories and second, to provide disabled men and women with these chairs. Through Remploy factories many men and women have learned a simple trade, which has enabled them to earn their living, whereas otherwise they would be dependent almost all their lives on National Assistance.

The motor-driven chairs which have been supplied have enabled these men and women not only to go to and from their work, which otherwise they would never have been able to do because, on account of their disabilities, very few are able to use buses or trams or ordinary means of locomotion, but also to have some small degree, at least, of social intercourse by going to see their friends and to meetings and taking part in social activities.

I have the honour to be a vice-president, with my hon. Friend the Member for the Southampton, Test (Dr. King) of the Invalid Chairs Association of Southampton and have had the opportunity of meeting these men and women. I admire the very courageous way in which they bear their disabilities and the brave way in which they try to make the most out of their lives in spite of those very serious disabilities. I am sure that these invalid chairs have been of very great help to them.

The increase in the petrol tax means that, on an average, their invalid chairs will cost them at least from 1s. to 2s. a week more to run. In answer to a Question the other day, the Parliamentary Secretary to the Ministry of Pensions said that the additional cost would be from one-ninth of a penny a mile to one-sixth of a penny per mile. For most of them that means an additional cost in petrol and oil of from 1s. to 2s. a week. In addition, these people suffer from the general increase in prices which both sides of the Committee admit is bound to result from the increase in the petrol tax.

I listened to the debate on the 4½d. increase in the petrol tax last year and heard hon. Member after hon. Member on the Conservative side say that this was the most inflationary form of tax which could be conceived and that it would be bound to mean a rise in the general level of the cost of living. I am afraid it will happen again this time and, of course, it will hit these unfortunate people.

They will be doubly hit, first, by the increase in the petrol tax and second by the increased cost of living. Most of them are earning very low wages. £4 10s. to £5 a week, and even those who have other sources of income are on a very low level. Hon. Members on all sides of the Committee must have sympathy with the desire of my hon. Friend the Member for Brierley Hill, and if this matter were put to a free vote not one hon Member would vote against it.

It may be said by the Financial Secretary that there are administrative difficulties in the way of accepting the Amendment. That may be so, but if so, I hope he will be able to say that if he cannot help these people in this manner he will help them through the agency of his hon. Friend by giving an annual grant to compensate them. I am sure that if he does that he will earn their gratitude and the thanks of hon. Members on all sides of the House.

Mr. Boyd-Carpenter

It may be convenient if at this stage I try to indicate the attitude of the Government towards the two Amendments which, I understand, under the Ruling of your predecessor in the Chair, Wing Commander Hulbert, we are now discussing. I agree with my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) that it was very appropriate that these Amendments should have been put forward by the hon. Member for Brierley Hill (Mr. Simmons), whose familiarity with the subject at the Ministry of Pensions we all recognise. Indeed, I have good reason to know the interest he took in the subject of the provision, for disabled Service pensioners, of motor cars and of tricycles, since I corresponded with him more than once on the subject and received replies which, while always sympathetic, were sometimes satisfactory.

The two Amendments are in the form of relieving petrol used in these vehicles from the increase in duty. It was made perfectly clear during the debate that whilst those Amendments for reasons, which I recollect moved me at one time, are in this form, no hon. Member is really very strongly attached to the form but is more concerned to be able to bring forward the point within the rules of order. In fact it has been the practice of successive Governments in dealing with this matter; if they have found it right and proper to make some variation, to make it not in the form proposed—that is by alleviation of the rate of duty—but by way of some fixed form of grant. That was the form followed, in respect of motor cars, by the last Government.

For that reason, I do not think I need detain the Committee by pointing out the reasons why this has always been done. Obviously, a state of affairs was created in which a relatively small quantity of petrol was taxed by reference to its use in particular vehicles at a lower rate, it would create not merely the administrative difficulties to which the hon. Member for Bermondsey (Mr. Mellish) referred, but a great deal of trouble not only to the servants of the State in administering it, but also to the beneficiaries, who would be compelled to keep records.

For that reason, as the Committee are aware, when this Petrol Duty was increased in the Budget of my right hon. Friend the line was taken in respect of motor cars that the proper way to deal with the matter was by way of an increased grant. As the Committee are aware, my hon. Friend the Minister of Pensions, on 9th April, informed the House that the grant was being raised, because of the rise in Petrol Duty, by £4 10s. a year from £52 10s. to £57 a year. In relation to the increase in duty, my hon. Friend was following substantially the line taken in the last two years by his predecesssors.

The Committee may care to recall that when, in 1950, the duty was increased by 9d. a gallon, the allowance was increased by £5 from £45 to £50, and last year, when there was a smaller increase of 4½d. per gallon of petrol, the grant was increased by £2 10s. So this year, in respect of an increase in duty of 7½d., the grant has been increased by £4 10s. from £52 10s. to £57. In regard to the second of the two Amendments we are now discussing, I think most hon. Members will agree that that is the practical and satisfactory way of dealing with the matter.

The first Amendment relates to invalid chairs, about which there has been considerable discussion. The position with respect to these invalid chairs is that no financial grant is made. My hon. Friend issues them and, I understand, maintains them, but no financial grant has been made in respect of them at any time. My hon. Friend issues them in a dual capacity. He issues them direct to the Service disability pensioners for whom he, as Minister, is responsible; and also, as agent for the Minister of Health, he issues them to what I may describe for this purpose as civilian disability casualties.

It is no doubt because there is no financial grant made in respect of these chairs that when the Petrol Duty was raised by the former Administration on the two occasions I have mentioned, in 1950 and in 1951, whereas a compensating figure was added to the grant to motor car users, no step was taken to mitigate the effect of the rise in duty upon those who use these chairs.

I have no doubt that was the main reason, as was also the fact that these chairs do a considerably larger mileage to the gallon than does the motor car. Be that as it may, the late Government, though they could, and felt able to compensate those with motor cars, they did not take steps in respect of those with chairs.

My hon. Friend the Minister of Pensions has been examining this matter and has found it necessary to look at the two classes of persons for whom chairs are issued from different points of view. The Ministry of Pensions has power under various enactments to make cash grants in certain circumstances, and with the concurrence of the Chancellor to those for whom it is responsible. The Minister of Health has no such power and I understand would require legislation to have it.

In those circumstances it is clearly impossible at the moment to do anything in respect of those chairs issued to the civilian disability casualties. In that respect we feel bound to adopt at present the line that was adopted by the previous Administration. But that difficulty does not arise, as I have made clear, in the case of those Service disability pensioners who are the responsibility of my hon. Friend. He has therefore decided that in all the circumstances of the case, and notwithstanding the precedent to the contrary, it would be proper to make a small grant in respect of the extra cost caused by the rise in Duty; that is to say to seek to fulfil, so far as the Service disability pensioner operating a chair is concerned, the intention of the Amendment.

The hon. Member for Southampton, Itchen (Mr. Morley) referred to the answer of my hon. Friend about the effect of this increase on the cost of operating the chairs. The figures he gave make it clear that in terms of cash the amount involved is very small. The calculation is complicated by the fact that there are two kinds of chairs, one with weather protection which, as a result of that protection, does fewer miles to the gallon—something in the neighbourhood of 45 to 50 miles—and one without weather protection, which, I understand, does 70 miles to the gallon.

8.45 p.m.

The decision to which my hon. Friend has come on behalf of the Government is that in respect of the chair with weather protection and the smaller mileage per gallon there will be an annual grant of £3 a year, and with respect to the other type an annual grant of £2 a year. That, on any reasonable calculation and in accordance with both my figures and those of the hon. Member for Southampton, Itchen, should cover the increased cost of operating these chairs in the ordinary manner, and counterbalance the effect of the rise in the duty.

Precise details will in due course be communicated by my hon. Friend to those concerned, and it would not be right for me to enter into details of the administrative arrangements which he proposes to make. But it is the intention that this decision should come into effect as quickly as possible, and I am sure that hon. Members with experience of the administration of the Ministry of Pensions know that that Department can move remarkably quickly in such circumstances.

Mr. George Isaacs (Southwark)

It is always a pleasure to take part in debates on war pensions, because politics do not enter into them at all and everyone is anxious to do the best they can for those concerned. We do appreciate the offer which has been made and the proposal that those who use the all-weather chair should get a grant of £3 and the other chair users a grant of £2. I presume that the grant of £4 10s. already given to the users of motor cars is in anticipation of this debate and that nothing more will be given in that case.

Mr. Boyd-Carpenter

The right hon. Gentleman is absolutely correct in that assumption. As he will recall, my hon. Friend made a statement on 9th April, in which I recollect he related directly the increase in respect of motor cars to the increase in the duty in exactly the same way as was done in 1950 and 1951.

Mr. Isaacs

I gathered that, because the Ministry of Pensions does like to anticipate the wishes of the House and to be able to move before they are pressed to do so by resolution and decision.

I would ask for a little more information about the civilians. I know the difficulties but I would put this to the Committee. Many of these civilians were injured during their service to the country just as the soldiers were. Perhaps they were bombed, or injured while carrying on their work in a factory, and I hope that we can be told something a little more definite about them. I do not think it possible to find any gathering of people who are more cheerful than the fellows who operate these chairs. They may be invalids in their chairs, but I would not like to compete against some of them in the manoeuvres they carry out in their chairs.

One man may have got his injury while wearing the uniform of the Crown and another while wearing an overall and working in a factory. It seems to me that it will be a little difficult to say that we will give one man something to help him along, but not give anything to the other.

From the tone of the Financial Secretary I judged that he was not adamant about this aspect, and was not turning down the proposal. He said that there was no power, and that to obtain it would require legislation. I say to the hon. Gentleman that, if he should be able to induce his right hon. Friend the Minister of Health to introduce a short Bill in this House to confer this power, we could give him a guarantee that it would have an unobstructed passage through the House.

Here is a gift which, so far as the amount is concerned, is as much as could be expected. It is a very fair offer, but there is this disappointment about the civilians, and I would like to know there could be some ray of hope that something would be done to deal with that matter. I assure the hon. Gentleman that we shall accept this concession, and that we shall not try to divide the Committee on the Amendment. We should be especially glad if the Financial Secretary could say that he will try to devise ways and means of making this very small concession, which would be of very great value to everybody concerned.

Mr. Boyd-Carpenter

Perhaps I should respond, as far as I can, to what the right hon. Gentleman has said on the subject of the civilian chairs. The position is really very difficult, and the only undertaking that I can give tonight is that I will convey what the right hon. Gentleman and hon. Members have said to the Minister of Health; I will see that he is informed of those views.

I think it is impossible to give any firmer commitment on this point—and I will be quite frank with the Committee—for this reason. Cash payments of this sort are payments for which the Ministry of Health has no arrangements at the moment, and it would be misleading the Committee to say that it is necessarily the case that it will be possible to overcome the real difficulties which exist. All that we can do is to say that what the right hon. Gentleman has said as to the merits of the matter obviously has very great force, and I can also re-assure the Committee, so far as the Treasury are concerned, that the financial element involved is really very small indeed, and not a serious factor in the situation.

If the Committee would be prepared to leave the matter like that, I will certainly convey what has been said to my right hon. Friend, but I do not want to mislead the Committee into the belief that it will necessarily be possible to do anything before Report stage. Very serious thought will have to be given as to the administrative steps to be taken. Such serious thought will be given, but I would not be playing fair with the Committee if I tried in one way or another to give a firm commitment as to the outcome.

Mr. Simmons

I thank the Financial Secretary for the concession as far as the Service people are concerned. We are sorry about the others, but we have had his explanation, and we feel sure that he will express to his right hon. Friend and those responsible the deep feeling in the Committee that there should be no difference of treatment between people suffering from the same disabilities.

Mr. George Chetwynd (Stockton-on-Tees)

Before my hon. Friend asks leave to withdraw the Amendment, may I ask the Financial Secretary whether it is too late to put down an Amendment to the National Health Service Bill, or alternatively, whether or not some such Amendment could not be put down in another place, where it would be given every facility for an easy passage? As to the administrative difficulties, could not the Minister of Pensions act as an agent in this matter, as he already acts as agent concerning wigs and other things?

Mr. Boyd-Carpenter

All these are aspects of the matter which certainly will be considered, but the hon. Gentleman will not expect me to give a snap answer from this Box on whether or not it would be possible to deal with the matter in the way he has suggested. His suggestion is now on record, and that makes certain that it will be considered.

Mr. Simmons

In view of the conciliatory attitude of the Financial Secretary, and of the manner in which we have been met part of the way, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. F. Beswick (Uxbridge)

I beg to move, in page 2, line 6, at the end, to insert: except that in the case of aviation spirit supplied for the use of flying and gliding clubs duly authorised and approved by the Minister of Civil Aviation the rate of duty shall be ninepence a gallon and the Treasury may make the necessary regulations for giving effect to this exception. I move this Amendment with a certain amount of what I hope is justifiable optimism, and my optimism will be matched by my brevity. The case for these flying clubs has always been supported by interested and informed hon. Members on both sides of the Committee. May I just say that I am sorry that my hon. Friend the Member for Lincoln (Mr. de Freitas) is not here to speak to this Amendment, to which his name is attached, because he has always shown a great interest in this matter, and it is only his official duties that take him away this evening.

On the previous occasion, a similar Amendment to this was moved by the hon. and learned Gentleman the present Attorney-General. As the support has come equally from both sides, I hope it will have this evening the same encouragement from the Government as it had in previous years from other Governments. The value of the flying clubs has never been in doubt in the House and the Labour Government, despite the very severe financial restrictions under which it was compelled to work after the war, contrived to do all it could to give some sympathetic encouragement to the clubs. We had the A.T.C. scholarship scheme, and the Government contrived to give a rebate of the tax which was imposed on all other users of hydrocarbon oils.

All the arguments which applied before apply with even greater force today. The current financial stringency affects the flying clubs more severely—and I suppose it affected them earlier—than it is affecting other activities. The aggravation of their financial difficulties is probably only matched by the increasing importance, both present and potential, of the role which they play.

People sometimes ask me why they are so important. Others ask why individuals who seek their sport in flying should receive financial encouragement more than those who turn to walking or cycling. One answer, with all respect to the cyclist, is that the aviator in time of war is probably in a position to help his country more than is the cyclist as such, although I would not like to belittle the gentleman who might have to ride a bicycle in any future war. It was so last time, and I am sure it would be the same in any future emergency.

If we are to remain in the forefront of the peoples of the world, we have to remain in the forefront of aviation. I do not think that we can accumulate in this country too much experience in the element of the air. We cannot have too many individuals who spend time in the air, and the more experience we have and the more people who are able to spend time in the air, the more likely are we to throw up the odd individual genius who will spur us on in our progress.

I do not want to labour these points, but in view of the small amount involved, probably less than £10,000, and in view of the potential advantages and the all-party interest and support that has been given to an Amendment of this character in previous years, I hope the Government will be able to accept it.

Sir Wavell Wakefield (St. Marylebone)

In a few brief words I wish to support this Amendment. Surely it is one of the vital necessities of this country that every possible encouragement and opportunity should be given to our young people to glide and fly. We all know that with rising costs everywhere, that opportunity is becoming increasingly difficult. Should help be given from the Treasury along the lines suggested in this Amendment, it will not cost the Treasury very much, but it will mean a great deal to the gliding and flying clubs many members of which are young people who have very little money to spend and for whom any help would be a great advantage. I very much hope the Government will see their way clear to give this help which I believe will be found of great national advantage.

9.0 p.m.

Air Commodore A. V. Harvey (Macclesfield)

I have much pleasure in supporting this Amendment. The flying clubs which have been in being now for something like 27 years have done nothing but good. They provide a very fine hobby for young men and women at weekends and in the evenings. When they started it was an expensive hobby, and indeed it still is. Nevertheless, London Transport have their own flying club and many classes of people are now able to undertake this important training.

Before the war we had the Civil Air Guard, and many people laughed at it; but when the war came its membership ran into hundreds of men who performed their flying duties gallantly on active service and in delivering aircraft under Transport Command. It paid a tremendous dividend. I agree with my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) that they were not all young people. There were men of over 50 years of age who did service delivering aircraft in this country.

This is a cheap form of building up a reserve strength of pilots and it helps to spread air-mindedness amongst the pilots' children and relatives and indeed among the whole population. If ever this country had an opportunity of building up a large merchant service of the air, it is now. That building up is taking place in the United States and in Canada and we must move very rapidly indeed if we are to do the same thing in the air as we did with cargo ships at sea.

I believe this concession will not cost the Government very much money. We are spending very large sums on defence and this movement can play a greater part in defence than is generally appreciated. I hope that my hon. Friend the Financial Secretary will see his way clear to give this assistance.

Mr. John Grimston (St. Albans)

I merely rise to say how pleased I was to see in an answer to a Written Question on 4th April that my hon. Friend the Financial Secretary proposed to give this relief. I assure him that those of us who try to keep our hands in in civil aviation are very grateful indeed that the efforts of the flying clubs are being recognised in this way.

Mr. Boyd-Carpenter

As my hon. Friend the Member for St. Albans (Mr. J. Grimston) has just pointed out, I think we have already met the substance of this Amendment. Like the previous one, it is in form one to relieve the petrol actually used for this purpose and by these bodies from duty; and for the same reason as was the case on the previous Amendment it has always been thought a much more convenient way to deal with this matter by grant.

The hon. Member for Lincoln (Mr. de Freitas), whose name actually appears first above this Amendment on the Order Paper, asked the Chancellor of the Exchequer on 4th April: whether he will extend the arrangements made last year to relieve the civil flying clubs of the increased Petrol Duty, so as to relieve them also of the additional duty included in this year's Budget. I replied, according to the OFFICIAL REPORT, monosyllabically, but I hope satisfactorily: Yes.—[OFFICIAL REPORT, 4th April, 1952; Vol. 498, c. 172.] It is the intention of the Government to follow the procedure of last year and by way of grant to compensate the bodies referred to in the Amendment for the full increase in the Petrol Duty. The cost will be some £9,000 in the present year and £11,000 in a full year, so the figure that the hon. Member for Uxbridge (Mr. Beswick) gave was substantially correct. I hope that meets the point. I need only add that one very good reason for doing this is that we accept what has been said on both sides of the Committee as to the valuable purpose served by these clubs.

Mr. Beswick

In view of that assurance, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. G. A. Pargiter (Southall)

I beg to move, in page 2, line 6, at the end, to insert: Provided that this subsection shall not authorise any increase in the rate of duty on diesel oil. This Amendment will cover a somewhat wider field than the two previous Amendments. It covers very largely the section of the transport industry in which heavy goods vehicles and heavy passenger vehicles are used. It is in those fields that the compression ignition engine has found its most useful metier, and where it operates to the best advantage. At the present time there is some alarm in transport circles—more perhaps than there has been previously—with regard to this duty.

Another factor which has caused some alarm among passenger vehicle operators is one to which I understand reference was made a few moments ago; that is the possibility of some further imposition on road transport to deal with the cost of railway tracks. The experience of road operators in relation to the money collected ostensibly for the upkeep of roads will not give them much heart to subscribe towards the railway tracks if they do not do any better than the roads have done. Quite apart from that, such an imposition would be strongly resisted as being quite unfair, and I hope that we shall hear from the Financial Secretary something which will allay to some extent the alarm which has been created.

The effect of this Amendment would be to allay many of the fears which are felt by all sections of the community about the possibility of further increased fares due to the increased tax on fuel. Although the number of vehicles operating on Diesel engines is relatively small compared with the general run of motor vehicles, their proportionate value from the point of view of passenger and goods carrying is relatively high. For that reason we attach considerable importance to this matter and we hope the Chancellor will be able to accept this Amendment.

Vehicles operating on Diesel oil are used mostly for heavy transport and, therefore, they involve the question of capital costs as against consumer costs. The effect of an increased Petrol Duty on consumer costs is not so permanent as a tax which has a bearing on capital costs—for example, in the case of heavy transport with all its ramifications throughout the industry, for the effect is felt for a long time, even after the tax is no longer there, because it increases the capital costs, the interest costs, and so on.

I imagine that the Government do not want to do something of this nature which will have a fairly permanent effect. I can understand them saying, "We want some more money; we will put a penny on a pint of beer." One drinks the beer and that is the end of it. There is no subsequent effect. [HON. MEMBERS: "There is."] Well, not on one pint of beer, at any rate. We should not worry too much about that, although we might grumble about it.

One of the things that I always opposed in connection with heavy transport was the imposition of Purchase Tax. I thought it was a bad tax on commercial vehicles because it added to the capital cost and entered very heavily into capital costs generally. In a heavy goods vehicle at the present time the fuel tax and Purchase Tax alone, with no other costs, amount to 4d. a mile. That, before one begins to meet any expenditure, is a pretty heavy imposition. I hope it will not go any further and that we might even hope to see some reduction as a result of this Amendment.

With regard to the cost, the British Road Federation have examined this matter and they estimate that about 1,150,000 tons of Diesel oils are used for road transport. By "Diesel oils" I refer specially to Diesel oils as used in the compression ignition engines for road vehicles as against other types of heavy fuel oils. It is anticipated that this relief, if it were granted, would cost only £9½ million. That sum, as against the £60 million odd which is, I believe, the total amount to be collected from this tax, should not be a matter which is beyond the possibility of the Exchequer to meet; but the corresponding advantage would be out of all proportion, because it would be spread over those particular sections where it would be to the greatest possible advantage.

There might be an argument with regard to some types of transport such as light delivery vans and vans of that nature. I think most people who operate them appreciate that they are not very efficient. Small parcel vans usually operate at very considerable cost and it might be argued that if they had to pay more for fuel it might tend towards economy.

I do not think that can be said of the large major companies concerned with heavy transport, including the British Road Services; nor even of C licence holders of heavy goods vehicles, and certainly not of the major passenger transport undertakings, which have to keep a very careful watch upon their operating costs. Therefore, I do not think it can be said that any additional tax could reasonably lead to any further economies in their operation. I think they have done everything they possibly can in that direction.

I would remind the Committee that the early development of the compression ignition engine was encouraged largely by the fact that the tax on fuel oils was only a penny a gallon. It remained at that figure until 1935, and that gave a tremendous impetus to the development of the compression ignition engine. The effect of that has been felt very largely on the more efficient transport systems. The efficiency of this engine is greater than that of the ordinary petrol type engine in relation to its fuel consumption.

That is a very important point. If we want economy in fuel we should obviously be encouraging some of the types of fuel which will give the greatest economy in use. Taking a double-deck bus as an example, the average oil consumption would probably be in the neighbourhood of 10 miles a gallon on the ordinary type of operation, and rather more on long-distance operations. A similar vehicle in use before the introduction of the compression ignition engine would operate at something like seven miles to the gallon, which was thought to be a fairly good average. Sometimes it was as low as six miles a gallon, although occasionally it went up to eight. I think we can take a comparison between 10 and seven miles to the gallon as being a fair one throughout the whole range of similar types of engine of similar power output, for the compression ignition engine and the ordinary petrol type engine respectively.

It seems to me that if we want to encourage economy in fuel we ought to do everything possible to encourage the development of the compression ignition engine, even in ranges of vehicles to which it does not at present apply. In other words, even in lighter types of vehicle, we badly need a type of engine which will give greater fuel consumption.

9.15 p.m.

The effect of that development would vastly offset any possible effect of a reduction in taxation, because it would provide what I understand is one of the things for which the Chancellor is looking—a reduction in our dollar purchases of oil. It would also help considerably in Diesel development for locomotive purposes, and that, of course, is another angle of development which ought to be encouraged. I hope it may be possible to give a further impetus to this type of development by means of a reduction in the tax from its present figure.

I believe that in the Department there is some sort of argument going on about whether or not we want to encourage the development and the use of this type of fuel oil. It is being argued, I understand, that the development of jet engines is causing a position to arise in which there may well be a surplus of the higher octane spirits, because in the cracking of the oil the development stage is such that it throws off a number of types of fuel at different levels. It may well be that a reduction in the use of piston-engined aircraft would leave us with a surplus in that direction. I hope that that argument will not be developed, and will not be allowed to develop very far in the Department to the detriment of the further development of the compression ignition engine, which is a safer unit, has a longer life than the petrol engine, and has all the grounds for encouraging its use in the future.

I have made, I hope, some case, as good as I may—perhaps slightly technical—for the Amendment which I have moved. I do not move it in a strictly political sense but because I believe it to be in the best interest of transport. Moreover, I believe that it is in the best interests of the future development of efficient types of vehicles which, after all, must be the desire of hon. Members in all parts of the Committee.

Mr. Donald Chapman (Birmingham, Northfield)

I am very pleased indeed to be able to say a word this evening about the effect of this subsection on bus fares—this time, in particular, bus fares in the second city of England and not in the first city. So much has been said tonight about the effect of the Petrol Duty on bus fares in London that I think it is about time someone drew attention to the position in Birmingham and showed exactly what is going to happen there.

If this Amendment were accepted, it would be of enormous help to Birmingham in a situation which is becoming very difficult indeed. In the first place, the position of Birmingham city transport is as follows. Already the department are running at a considerable loss, and I have no hesitation in saying that I should have been quite as pressing on this question of Diesel oil if I had been in the last House of Commons as I am at the moment, because there is no doubt at all that it is this taxation which is making Birmingham's transport difficulties even worse.

Mr. Percy Shurmer (Birmingham, Sparkbrook)

They used to run at a profit.

Mr. Chapman

As I am reminded, they used to run at a profit. The position today is that the estimated deficit at 31st March, 1952—that is, only one month ago—was some £410,000. The effect of this Clause will be, because all the buses in Birmingham run exclusively on Diesel oil, to make that deficit increase by another £187,500. That means, because of the accumulating results of taxation over the last few years on Diesel oil, that in Birmingham we are going to have to face very shortly, a 10 per cent. increase in fares.

That is an enormous figure. If the British Transport Commission had ever at one time asked for a 10 per cent. increase or more, there would have been a considerable outcry, but in Birmingham, to get the thing balanced, never mind making a profit, we shall need now something like a 10 per cent. increase. Every £200,000 is, I am told, a 3 per cent. increase, and the deficit is to be increased to about £600,000. That is an enormous burden.

Consider my own constituency. This is the real reason I am raising the matter, because this is of particular concern to constituencies on the outskirts of the big cities. This is a tax, in effect, on the travelling public particularly in outlying areas, because they depend to an enormous extent on transport to take them into the city and, perhaps, over to the other side of it.

It is often thought that, because I have the Austin works in my constituency, with 20,000 employees, I must have people converging on their place of work from quite near by. In fact, however, there are literally thousands of people who pour into those works from the other side of Birmingham, from Bromsgrove, and from all over the Midlands. They come in from the Black Country, some in special buses, some in cars, and some by the ordinary transport. At the same time, many people in my constituency go outside it to work. It is an area where there is an enormous amount of travelling. Practically no one works in his own constituency.

What does it mean? It would not be so bad if we were facing a normal rise in transport costs and fares, but this means that in Birmingham, for example, the increased costs and fares resulting from the tax on Diesel oil will constitute a most pressing reason why the trade unions will be demanding increases in wages. And good luck to them. I have no reason at all to be saying they should not be pressing for increased wages. I do not want to be strongly partisan because I am hoping for a concession, but I am very tempted to say that no one could blame the trade unions, because the whole effect of this Budget has been to incite them to demand wage increases. There are the increased fares, the concession to taxpayers above the £1,000 limit, and the general increased difficulties of taxpayers with the lower incomes.

Air Commodore Harvey

Will the hon. Gentleman say when the bus company last made a profit? He did say it made a profit. In what year?

Mr. Chapman

I have not the figures. I have only the fact that in 1951 there was a deficit of £200,000. If the hon. and gallant Gentleman is saying that I should, therefore, be blaming the last Government too, then in this respect, at least, I agree with him.

Birmingham is one of the areas which has got to make a considerable contribution to the export trade. We in the engineering industries have got to make up for some of the shortfall in the export of textiles, for example. What help is it going to be for this whole area to be faced with demands for increased wages and prices at a time when the sellers' market has disappeared or is finally disappearing? We are going to be faced with wage demands throughout the country, in the engineering industry and certainly in the whole of the Birmingham area where transport costs for the ordinary individual are going to go up, and it will cost more for them to move about this large area. That is the second factor directly inciting further wage demands.

In the second city of the Kingdom, never mind the first, which has already been mentioned during the earlier parts of this debate, the result of the accumulated effect of this tax is to be a 10 per cent. increase in transport fares, and that will possibly be more when all the other increases which the Budget is imposing reveal their full effect. I hope Diesel oil can be exempted from the tax because it would make a considerable difference and would help not only the family budgets, but would stem some of the wage demands, and thus help to a considerable extent a very important and a very large area of this country.

The Minister of State for Economic Affairs (Sir Arthur Salter)

This Amendment has been moved in two very reasonable, moderate and persuasive speeches, but the speakers have taken a totally different line. The first speech by the hon. Member for Southall (Mr. Pargiter) was based upon the desirability of giving special encouragement to one type of vehicle and engine using one type of fuel as against another. The hon. Member for Northfield (Mr. Chapman), put his case on rather different grounds. I should like first to refer to the arguments put forward by the hon. Member for Southall.

In order to put the matter in its proper perspective, it is well to remember that this Amendment, if passed, would involve the Revenue in a loss of £9 million, a very substantial sum. It would also have the effect of giving a considerably greater advantage to passenger vehicles than to goods vehicles. In fact, of the Diesel oil—

Mr. Pannell

As I understood it, we are considering two Amendments together. One is concerned with an exemption for Diesel oil and the other with an exemption of passenger-carrying vehicles. Is that ruled out of order, or are we doing that?

The Chairman

No, I did not rule the first Amendment out of order. I thought the second Amendment was a wider Amendment and selected it because all the arguments which might have been used in support of the first Amendment could be used on the second, which covers a much wider field.

Mr. Pannell

If that is so, the Minister of State for Economic Affairs is not quite accurate, because the Amendment moved embraced the larger issue of Diesel oil and it does not affect passenger vehicles only. In fact, some of these vehicles are interchangeable, but the point I am making is that this applies to goods vehicles as well as passenger vehicles, and if the right hon. Gentleman is putting the case that goods vehicles do not run on Diesel oil, then I think he is wrong.

Sir A. Salter

I am going to refer to passenger vehicles later on, but at the moment I am dealing with what the hon. Member for Southall said about the desirability, as he thought, of giving special encouragement to one type of engine using Diesel oil as against petrol. When I have answered his arguments to the best of my ability, I shall come to the arguments of the hon. Member for Northfield, who was particularly concerned with passenger vehicles.

Taking this Amendment in its full scope, and as the mover argued it, it would, as I have already said, involve a loss to the Revenue of £9 million, which is a very considerable loss indeed and more than we are prepared to face. If the Amendment were passed in this form and not in the more limited form, it would incidentally give greater advantage to passenger vehicles than to goods vehicles because a smaller proportion of goods than passenger vehicles use Diesel oil. The actual totals are that 775,000 tons of oil are used by passenger vehicles and a little less than half of that amount by goods vehicles.

9.30 p.m.

The case made by the hon. Gentleman was really that because Diesel engines use less oil per mile we should do something by way of a special remission to encourage that type of engine. That is a very undesirable form of encouragement. That more miles are obtained out of Diesel engines than out of petrol engines is a natural advantage which influences people in choosing the form of engine they prefer. It is one of the factors determining the proportions in which petrol and Diesel engines are built.

Mr. Pannell

The right hon. Gentleman no doubt appreciates that the capital cost of Diesel vehicles is very much higher.

Sir A. Salter

I quite agree, but all these factors come into the calculation of the man who is choosing what sort of vehicle he will buy, and determine the proportions in which Diesel and petrol vehicles are built. Incidentally and accidentally we give some form of encouragement to the Diesel as against the petrol engine. The mere fact that the Diesel engine uses less oil per mile means that an increase in an oil tax applying to both engines alike increases that advantage. I might, if I were going to be pedantic, say that in order not to start a distorting influence we might propose to correct that advantage, but I do not develop that argument.

It is extremely undesirable that the type of engine for one class of vehicle or another should be determined not by the real economic advantage conferred by the vehicle whose fuel gives more miles, but by the further calculation that by choosing, say, a Diesel rather than a petrol engine the purchaser and the maker would escape some tax which would otherwise be paid. That would be undesirable not only because of the revenue which would be lost, but because it would determine that Diesel engines might be chosen for work for which petrol engines would be more suitable. It would be undesirable deliberately to introduce that distorting factor into the influences which determine the design and choice of vehicles for different sorts of traffic.

Now I will say a word or two about the arguments of the hon. Member for Northfield, who was supporting the Amendment but spoke as if he were supporting an Amendment which was not called and by which a special preference was to be given to passenger as distinct from goods vehicles. If the Amendment had been so restricted, it would have meant a smaller loss of revenue, some £6½ million instead of £9 million, but there would have been an even more indefensible form of discrimination between one class of road user and another, between those who carry goods and those who carry passengers. In general I thought practically the entire argument of the hon. Gentleman was one against the increase in tax which is introduced in the Budget, that is to say, the question that was debated earlier this evening and upon which the Committee has voted.

Mr. Chapman

If the right hon. Gentleman will allow me, I was saying that in the case of bus fares, which are a common charge for the whole community, it is really inciting wage increases and all the bad consequences that follow, whereas the general tax on petrol is to some extent a luxury tax and therefore would not have that general effect.

Sir A. Salter

I would not agree with the hon. Member that the general tax on petrol, covering the bulk of the lorry traffic of this country, could be regarded as in any sense a luxury tax.

Mr. Chapman

In some instances.

Sir A. Salter

I do not think the hon. Member has made a case for discriminating between the carriage of passengers and the carriage of goods. I think his argument could be fairly described by saying that it was really addressed to the harm caused by the increase in tax which has been proposed, and was not an argument for this Amendment. It is true that if this Amendment were carried some of the revenue we are obtaining would be lost and that for certain classes of transport the burden would be somewhat reduced. Essentially, however, his argument was one against an increase in tax, and that we disposed of earlier.

Taking the Amendment as it was proposed, it would be highly undesirable to give a special form of exemption, even apart from the loss of revenue that would involve in order deliberately to weight the scales in favour of one kind of vehicle as against another and to weight the scales against one set of manufacturers who make one type of vehicle as against those who make another.

Mr. Pargiter

May I draw the attention of the right hon. Gentleman to the fact that the scales were deliberately weighted to increase the development of the compression ignition engine because it was found to be a more efficient unit and, in operation, much more economical in the use of fuel? Therefore, it would not be creating a new precedent; it would be continuing something that has already been done.

Sir A. Salter

I do not want to go back into history beyond saying that some precedents are good and some are not so good. I do not think it would be well to add to the natural advantages which are possessed by the Diesel engine, of being able to go more miles for a given amount of oil, a further deliberate subsidy of a kind in order to encourage one type of vehicle rather than another, a type of vehicle which would not otherwise have been chosen by the user or made by the manufacturer.

Mr. Pargiter

In my own experience users generally are anxious for a reliable lighter Diesel engine which will give them that economy in fuel which they look for so much.

Sir A. Salter

In that case there is the natural advantage already, which is retained and which is to some extent increased inasmuch as the increase proposed in the Budget is general. I will not develop that point further except to add that the hon. Member made one mistake. He gave as one of the reasons for this Amendment that it would encourage the use of Diesel locomotives. If he meant locomotives by road, his argument is relevant. If, however, he meant locomotives on rails, as I think he did, that is not relevant because they are already exempt, and therefore this Amendment is not required to attain the end desired by the hon. Member.

For those reasons, I should not agree with the arguments put forward by the mover of the Amendment. As regards the hon. Member for Northfield, I think that his arguments were addressed rather to a point which we have already debated and decided. I am therefore unable to accept the Amendment.

Mr. Alfred Robens (Blyth)

Watching ice hockey on television from time to time, one is always interested in seeing during the play a number of players going off and a fresh lot of players coming on. In the last hour the players who were with us earlier have departed, and in has come the Minister of State for Economic Affairs and the Chancellor of the Exchequer himself, presumably to keep a fatherly eye upon his Minister of State. I have been thinking that it would have been better had the Government left the Financial Secretary with us, because we were getting on splendidly with him and, probably, the Government would get the Clause very much quicker had their original team been left.

I have been rather surprised at the right hon. Gentleman's excursions into the technicalities of the Diesel engine versus the ordinary combustion engine. Any engineers who read what the Minister of State has had to say, will be extremely surprised that he ever ventured into those fields.

The Government have found themselves in great difficulties lately with regard to fares. They have found themselves in great muddle and confusion, not knowing where they were going; and if Dame Rumour is to be believed, there is already one Ministerial casualty as a result. I should have thought that nothing would have been done by the right hon. Gentleman to increase fares as the Government's proposal will obviously increase them. We on this side of the Committee are helping the Government to try to get back a little of the popularity that they once had for a fleeting moment, and we are urging them to keep fares down.

The right hon. Gentleman was talking about the buses in Birmingham. There are 1,497 Diesel-engined buses there, and the extra cost for them will be £149,700.

Mr. Chapman

It will be £187,000.

Mr. Robens

I will accept the higher figure. I was merely quoting the figure that has been given to me. The fact is that the increase is considerable. Obviously, fares will be affected, because there are increases in other commodities, and I am very surprised that the Government have not taken the opportunity of the get-out which we have provided in the Amendment in order to keep fares down.

There are two other features. The Government are interested in the export trade and in encouraging agriculture. They must know that more and more goods are being conveyed to the docks for shipment by lorries driven by Diesel engines, and that this proposal will acid to the cost of transport. The Government must know that more and more in agriculture the Diesel engine is being used and that it must add to agricultural costs.

Therefore, by not looking at this matter and examining it to see whether they can find a method of exempting Diesel oil, the Government are shutting their eyes to the possibility of helping the export trade, of helping the fares position, and of helping agriculture. I am surprised that they have not taken advantage of the opportunity we have given.

9.45 p.m.

Sir A. Salter

The hon. Member said that I had plunged into technicalities which apparently I did not understand. Will he please give one instance? He has so far said nothing which is inconsistent with what I said as regards the technical side of this question. Would he address himself to the question as to the desirability of making a distinction between the tax on Diesel oil and the tax on petrol which, after all, is the point of this Amendment?

Mr. Robens

Apparently the right hon. Gentleman thinks he is still on the Opposition side of the Committee if he wants me to spend a great deal of time in answering those questions. I was helping him by skating over those matters into which my hon. Friends have gone in great detail. He said that a distinction is made in connection with locomotives. If he puts on his thinking cap he will find some method of making a distinction for users of Diesel oil.

Sir A. Salter

I did not say it should be made, but I said that it could be made.

Mr. Robens

So far as locomotive users are concerned, it is exempt.

Sir A. Salter

But this is a distinction between road users. The Amendment desires to give a special advantage to a particular form of road vehicle as against another form of road vehicle, and surely the case for the Amendment is to show that that distinction is desirable.

Mr. Robens

It is a pity the right hon. Gentleman was not here earlier. Of course he may not know, because he may not have read the Treasury papers today,

that about half an hour ago a concession was given in relation to invalid tricycles. It was pointed out to us by the Financial Secretary that the Treasury could only give the concession in respect of ex-Service disabled persons using tricycles because it was only the Minister of Pensions who had power to make grants in respect of those persons and he was unable much as he would like, to give a similar concession to civilian disabled who had the use of tricycles.

What the right hon. Gentleman has just said in relation to Diesel oil versus petrol is that his hon. Friend should not have made the concession because the concession would not be made to both kinds of people who are disabled and the only difference is that one kind were disabled in war and the other in the factories. It is not a good argument to say that I must now show the right hon. Gentleman just how to make the difference between the petrol and the Diesel engine.

I say that Diesel oil enters very much indeed into passenger fares and for that reason and that reason alone it would be a good thing to exempt it. It enters into agriculture and for that reason and that reason alone it would be a good thing to exempt it. It enters very much into the carrying of heavy goods to the ports in connection with our export trade, and for that reason it would be worth while trying to find a method of exempting it from the duty. I regard the intervention of the right hon. Gentleman as foolish in view of what his hon. Friend has done in the Committee half an hour ago, and I propose that we should now pass to the next stage and record our objection to the reply he has made and the lack of effort to do anything in this matter, by going into the Division Lobby.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 266 Noes, 284.

Division No. 108.]	AYES	[9.50 p.m.
Acland, Sir Richard	Barnes, Rt. Hon. A. J.	Boardman, H.
Adams, Richard	Bartley, P.	Bottomley, Rt. Hon. A. G.
Albu, A. H.	Bellenger, Rt. Hon. F. J.	Bowden, H. W.
Allen, Arthur (Bosworth)	Bence, C. R.	Bowen, E. R.
Anderson, Frank (Whitehaven)	Benn, Wedgwood	Braddock, Mrs. Elizabeth
Attlee, Rt. Hon. C. R.	Benson, G.	Brockway, A. F.
Awbery, S. S.	Beswick, F.	Brook, Dryden (Halifax)
Ayles, W. H.	Bevan, Rt. Hon. A. (Ebbw vale)	Broughton, Dr. A. D. D.
Bacon, Miss Alice	Bing, G. H. C.	Brown, Rt. Hon. George (Belper)
Baird, J.	Blackburn, F.	Brown, Thomas (Ince)
Balfour, A.	Blyton, W. R.	Burke, W. A.
Burton, Miss F. E.	Holt, A. F.	Price, Philips (Gloucestershire, W.)
Butler, Herbert (Hackney, S.)	Houghton, Douglas	Proctor, W. T.
Callaghan, L. J.	Hoy, J. H.	Pryde, D. J.
Carmichael, J.	Hubbard, T. F.	Pursey, Cmdr. H.
Castle, Mrs. B. A.	Hudson, James (Ealing, N.)	Reeves, J.
Champion, A. J.	Hughes, Cledwyn (Anglesey)	Reid, Thomas (Swindon)
Chapman, W. D.	Hughes, Emrys (S. Ayrshire)	Reid, William (Camlachie)
Chetwynd, G. R.	Hughes, Hector (Aberdeen, N.)	Rhodes, H.
Clunie, J.	Hynd, H. (Accrington)	Richards, R.
Cocks, F. S.	Hynd, J. B. (Attercliffe)	Robens, Rt. Hon. A.
Coldrick, W.	Irvine, A. J. (Edge Hill)	Roberts, Albert (Normanton)
Collick, P. H.	Irving, W. J. (Wood Green)	Roberts, Goronwy (Caernarvonshire)
Cook, T. F.	Isaacs, Rt. Hon. G. A.	Rogers, George (Kensington, N.)
Corbet, Mrs. Freda	Janner, B.	Ross, William
Cove, W. G.	Jay, Rt. Hon. D. P. T.	Royle, C.
Craddock, George (Bradford, S.)	Jager, George (Goole)	Schofield, S. (Barnsley)
Crosland, C. A. R.	Jeger, Dr. Santo (St. Pancras, S.)	Shackleton, E. A. A.
Crossman, R. H. S.	Jenkins, R. H. (Stechford)	Shawcross, Rt. Hon. Sir Hartley
Cullen, Mrs. A.	Johnson, James (Rugby)	Shinwell, Rt. Hon. E.
Dalton, Rt. Hon. H.	Johnston, Douglas (Paisley)	Short, E. W.
Darling, George (Hillsborough)	Jones, David (Hartlepool)	Shurmer, P. L. E.
Davies, A. Edward (Stoke, N.)	Jones, Frederick Elwyn (West Ham, S.)	Silverman, Julius (Erdington)
Davies, Ernest (Enfield, E.)	Jones, Jack (Rotherham)	Simmons, C. J. (Brierley Hill)
Davies, Harold (Leek)	Jones, T. W. (Merioneth)	Slater, J.
Davies, Stephen (Merthyr)	Keenan, W.	Smith, Ellis (Stoke, S.)
Deer, G.	Kenyon, C.	Smith, Norman (Nottingham, S.)
Delargy, H. J.	Key, Rt. Hon. C. W.	Sorensen, R. W.
Dodds, N. N.	King, Dr. H. M.	Soskice, Rt. Hon. Sir Frank
Donnelly, D. L.	Kinley, J.	Sparks, J. A.
Driberg, T. E. N.	Lee, Frederick (Newton)	Steele, T.
Dugdale, Rt. Hon. John (W. Bromwich)	Lee, Miss Jennie (Cannock)	Stokes, Rt. Hon. R. R.
Ede, Rt. Hon. J. C.	Lever, Harold (Cheetham)	Strauss, Rt. Hon. George (Vauxhall)
Edelman, M.	Lever, Leslie (Ardwick)	Summerskill, Rt. Hon. E.
Edwards, John (Brighouse)	Lewis, Arthur	Swingler, S. T.
Edwards, Rt. Hon. Ness (Caerphilly)	Lindgren, G. S.	Sylvester, G. O.
Edwards, W. J. (Stepney)	Logan, D. G.	Taylor, Bernard (Mansfield)
Evans, Albert (Islington, S.W.)	MacColl, J. E.	Taylor, John (West Lothian)
Evans, Edward (Lowestoft)	McGhee, H. G.	Taylor, Rt. Hon. Robert (Morpeth)
Evans, Stanley (Wednesbury)	McInnes, J.	Thomas, David (Aberdare)
Ewart, R.	McKay, John (Wallsend)	Thomas, George (Cardiff)
Fernyhough, E.	McLeavy, F.	Thomas, Iorwerth (Rhondda, W.)
Field, W. J.	McNeil, Rt. Hon. H.	Thomas, Ivor Owen (Wrekin)
Fienburgh, W.	MacPherson, Malcolm (Stirling)	Thurtle, Ernest
Finch, H. J.	Mainwaring, W. H.	Tomney, F.
Fletcher, Eric (Islington, E.)	Mallalieu, E. L. (Brigg)	Turner-Samuels, M.
Follick, M.	Mallalieu, J. P. W. (Huddersfield, E.)	Ungoed-Thomas, Sir Lynn
Foot, M. M.	Manuel, A. C.	Usborne, H. C.
Forman, J. C.	Marquand, Rt. Hon. H. A.	Viant, S. P.
Fraser, Thomas (Hamilton)	Mayhew, C. P.	Wade, D. W.
Freeman, John (Watford)	Mellish, R. J.	Wallace, H. W.
Freeman, Peter (Newport)	Messer, F.	Watkins, T. E.
Gaitskell, Rt. Hon. H. T. N.	Mikardo, Ian	Webb, Rt. Hon. M. (Bradford, C.)
Gibson, C. W.	Mitchison, G. R.	Weitzman, D.
Glanville, James	Monslow, W.	Wells, Percy (Faversham)
Gooch, E. G.	Moody, A. S.	Wells, William (Walsall)
Gordon Walker, Rt. Hon. P. C.	Morgan, Dr. H. B. W.	West, D. G.
Greenwood, Anthony (Rossendale)	Morley, R.	Wheatley, Rt. Hon. John
Greenwood, Rt. Hon. Arthur (Wakefield)	Morris, Percy (Swansea, W.)	White, Mrs. Eirene (E. Flint)
Grey, C. F.	Morrison, Rt. Hon. H. (Lewisham, S.)	White, Henry (Derbyshire, N.E.)
Griffiths, David (Rother Valley)	Moyle, A.	Whiteley, Rt. Hon. W.
Griffiths, Rt. Hon. James (Llanelly)	Mulley, F. W.	Wigg, George
Griffiths, William (Exchange)	Murray, J. D.	Wilcock, Group Capt. C. A. B.
Grimond, J.	Neal, Harold (Bolsover)	Wilkins, W. A.
Hale, Leslie (Oldham, W.)	Noel-Baker, Rt. Hon. P. J.	Willey, Frederick (Sunderland, N.)
Hall, Rt. Hon. Glenvil (Colne Valley)	Oldfield, W. H.	Willey, Octavius (Cleveland)
Hall, John (Gateshead, W.)	Oliver, G. H.	Williams, David (Neath)
Hamilton, W. W.	Orbach, M.	Williams, Rev. Llywelyn (Abertillery)
Hannan, W.	Oswald, T.	Williams, Ronald (Wigan)
Hardy, E. A.	Padley, W. E.	Williams, W. R. (Droylsden)
Hargreaves, A.	Paling, Rt. Hon. W. (Dearne Valley)	Williams, W. T. (Hammersmith, S.)
Harrison, J. (Nottingham, E.)	Paling, Will T. (Dewsbury)	Winterbottom, Ian (Nottingham, C.)
Hastings, S.	Pannell, Charles	Winterbottom, Richard (Brightside)
Hayman, F. H.	Pargiter, G. A.	Woodburn, Rt. Hon. A.
Healey, Denis (Leeds, S.E.)	Parker, J.	Wyatt, W. L.
Henderson, Rt. Hon. A. (Rowley Regis)	Paton, J.	Yates, V. F.
Herbison, Miss M.	Peart, T. F.
Hewitson, Capt. M.	Plummer, Sir Leslie	TELLERS FOR THE AYES:
Hobson, C. R.	Porter, G.	Mr. Pearson and Mr. Holmes.
Holman, P.	Price, Joseph T. (Westhoughton)
NOES
Aitken, W. T.	Amery, Julian (Preston, N.)	Arbuthnot, John
Allan, R. A. (Paddington, S.)	Amory, Heathcoat (Tiverton)	Ashton, H. (Chelmsford)
Alport, C. J. M.	Anstruther-Gray, Major W. J.	Assheton, Rt. Hon. R. (Blackburn, W.)

Astor, Hon. J. J. (Plymouth, Sutton)	Gough, C. F. H.	Mellor, Sir John
Astor, Hon. W. W. (Bucks, Wycombe)	Gower, H. R.	Molson, A. H. E.
Baker, P. A. D.	Graham, Sir Fergus	Moore, Lt.-Col. Sir Thomas
Baldock, Lt.-Cmdr. J. M.	Gridley, Sir Arnold	Morrison, John (Salisbury)
Baldwin, A. E.	Grimston, Hon. John (St. Albans)	Mott-Radclyffe, C. E.
Banks, Col. C.	Grimston, Sir Robert (Westbury)	Nabarro, G. D. N.
Barber, A. P. L.	Harden, J. R. E.	Nicholls, Harmar
Barlow, Sir John	Hare, Hon. J. H.	Nicholson, Godfrey (Farnham)
Baxter, A. B.	Harris, Frederic (Croydon, N.)	Nicolson, Nigel (Bournemouth, E.)
Beach, Maj. Hicks	Harris, Reader (Heston)	Nield, Basil (Chester)
Bell, Philip (Bolton, E.)	Harrison, Col. J. H. (Eye)	Noble, Cmdr. A. H. P.
Bell, Ronald (Bucks, S.)	Harvey, Air Cdre. A. V. (Macclesfield)	Nugent, G. R. H.
Bennett, F. M. (Reading, N.)	Harvey, Ian (Harrow, E.)	Oakshott, H. D.
Bennett, Dr. Reginald (Gosport)	Harvie-Watt, Sir George	Odey, G. W.
Bennett, William (Woodside)	Hay, John	O'Neill, Rt. Hon. Sir H. (Antrim, N.)
Bevins, J. R. (Toxteth)	Head, Rt. Hon. A. H.	Orr, Capt. L. P. S.
Birch, Nigel	Heald, Sir Lionel	Orr Ewing, Charles Ian (Hendon, N.)
Bishop, F. P.	Heath, Edward	Orr-Ewing, Ian L. (Weston-super-Mare)
Black, C. W.	Higgs, J. M. C.	Osborne, C.
Boothby, R. J. G.	Hill, Dr. Charles (Luton)	Partridge, E.
Bossom, A. C.	Hill, Mrs. E. (Wythenshawe)	Peaks, Rt. Hon. O.
Boyd-Carpenter, J. A.	Hinchingbrooke, Viscount	Perkins, W. R. D.
Boyle, Sir Edward	Hirst, Geoffrey	Peto, Brig. C. H. M.
Braine, B. R.	Holland-Martin, C. J.	Peyton, J. W. W.
Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)	Hollis, M. C.	Pickthorn, K. W. M.
Brooke, Henry (Hampstead)	Holmes, Sir Stanley (Harwich)	Pilkington, Capt R. A.
Brooman-White, R. C.	Hopkinson, Henry	Pitman, I. J.
Browne, Jack (Govan)	Hornsby-Smith, Miss M. P.	Powell, J. Enoch
Buchan-Hepburn, Rt. Hon. P. G. T.	Horobin, I. M.	Price, Henry (Lewisham, W.)
Bullard, D. G.	Horsbrugh, Rt. Hon. Florence	Prior-Palmer, Brig. O. L.
Bullock, Capt. M.	Howard, Gerald (Cambridgeshire)	Profumo, J. D.
Bullus, Wing Commander E. E.	Howard, Greville (St. Ives)	Raikes, H. V.
Burden, F. F. A.	Hudson, Sir Austin (Lewisham, N.)	Rayner, Brig. R.
Butcher, H. W.	Hudson, W. R. A. (Hull, N.)	Remnant, Hon. P.
Butler, Rt. Hon. R. A. (Saffron Walden)	Hurd, A. R.	Renton, D. L. M.
Carr, Robert (Mitcham)	Hutchinson, Sir Geoffrey (Ilford, N.)	Roberts, Peter (Heeley)
Carson, Hon. E.	Hutchison, Lt.-Cdm. Clark (E'b'rgh W.)	Robertson, Sir David
Cary, Sir Robert	Hyde, Lt.-Col. H. M.	Robinson, Roland (Blackpool, S.)
Channon, H.	Hylton-Foster, H. B. H.	Robson-Brown, W.
Clarke, Col. Ralph (East Grinstead)	Jenkins, R. C. D. (Dulwich)	Rodgers, John (Sevenoaks)
Clarke, Brig. Terence (Portsmouth, W.)	Jennings, R.	Roper, Sir Harold
Clyde, Rt. Hon. J. L.	Johnson, Eric (Blackley)	Ropner, Col. Sir Leonard
Cole, Norman	Jones, A. (Hall Green)	Russell, R. S.
Colegate, W. A.	Joynson-Hicks, Hon. L. W.	Ryder, Capt. R. E. D.
Cooper, Sqn. Ldr. Albert	Kaberry, D.	Salter, Rt. Hon. Sir Arthur
Cooper-Key, E. M.	Keeling, Sir Edward	Sandys, Rt. Hon. D.
Craddock, Beresford (Spelthorne)	Kerr, H. W. (Cambridge)	Schofield, Lt.-Col. W. (Rochdale)
Cranborne, Viscount	Lambert, Hon. G.	Scott, R. Donald
Crookshank, Capt. Rt. Hon. H. F. C.	Lambton, Viscount	Scott-Miller, Cmdr. R.
Crosthwaite-Eyre, Col. O. E.	Lancaster, Col. C. G.	Shepherd, William
Crouch, R. F.	Law, Rt. Hon. R. K.	Simon, J. E. S. (Middesbrough, W.)
Crowder, John E. (Finchley)	Leather, E. H. C.	Smiles, Lt.-Col. Sir Walter
Crowder, Petre (Ruislip—Northwood)	Legge-Bourke, Maj. E. A. H.	Smithers, Peter (Winchester)
Darling, Sir William (Edinburgh, S.)	Legh, P. R. (Petersfield)	Smithers, Sir Waldron (Orpington)
Davidson, Viscountess	Lennox-Boyd, Rt. Hon. A. T.	Smyth, Brig. J. G. (Norwood)
Deedes, W. F.	Lindsay, Martin	Snadden, W. McN.
Digby, S. Wingfield	Linstead, H. N.	Soames, Capt. C.
Dodds-Parker, A. D.	Lloyd, Rt. Hon. G. (King's Norton)	Spearman, A. C. M.
Donaldson, Cmdr. C. E. McA.	Lloyd, Maj. Guy (Renfrew, E.)	Speir, R. M.
Donner, P. W.	Lloyd, Rt. Hon. Selwyn (Wirral)	Spence, H. R. (Aberdeenshire, W.)
Doughty, C. J. A.	Lockwood, Lt.-Col. J. C.	Spans, Sir Patrick (Kensington, S.)
Douglas-Hamilton, Lord Malcolm	Longden, Gilbert (Herts, S.W.)	Stanley, Capt. Hon. Richard
Drayson, G. B.	Low, A. R. W.	Stevens, G. P.
Drewe, C.	Lucas, Sir Jocelyn (Portsmouth, S.)	Steward, W. A. (Woolwich, W.)
Dugdale, Maj. Rt. Hn. Sir T. (Richmond)	Lucas, P. B. (Brentford)	Stewart, Henderson (Fife, E.)
Duncan, Capt. J. A. L.	Lucas-Tooth, Sir Hugh	Stoddart-Scott, Col. M.
Duthie, W. S.	McCorquodale, Rt. Hon. M. S.	Storey, S.
Eden, Rt. Hon. A.	Macdonald, Sir Peter (I. of Wight)	Strauss, Henry (Norwich, S.)
Elliot, Rt. Hon. W. E.	Mackeson, Brig. H. R.	Stuart, Rt. Hon. James (Moray)
Errol, F. J.	McKibbin, A. J.	Studholme, H. G.
Fell, A.	McKie, J. H. (Galloway)	Summers, G. S.
Finlay, Graeme	MacLeod, Iain (Enfield, W.)	Sutcliffe, H.
Fisher, Nigel	Macmillan, Rt. Hon. Harold (Bromley)	Taylor, William (Bradford, N.)
Fleetwood-Hesketh, R. F.	Macpherson, Maj. Niall (Dumfries)	Teeling, W.
Fletcher-Cooke, C.	Maitland, Comdr. J. F. W. (Horncastle)	Thomas, Rt. Hon. J. P. L. (Hereford)
Fort, R.	Maitland, Patrick (Lanark)	Thomas, P. J. M. (Conway)
Foster, John	Manningham-Buller, Sir R. E.	Thompson, Kenneth (Walton)
Fraser, Sir Ian (Morecambe & Lonsdale)	Markham, Major S. F.	Thompson, Lt-Cdr. R. (Croydon, W.)
Fyfe, Rt. Hon. Sir David Maxwell	Marlowe, A. A. H.	Thorneycroft, R. Hn. Peter (Monmouth)
Gage, C. H.	Marples, A. E.	Thornton-Kemsley, Col. C. N.
Galbraith, Cmdr. T. D. (Pollok)	Marshall, Douglas (Bodmin)	Tilney, John
Gammans, L. D.	Marshall, Sidney (Sutton)	Turner, H. F. L.
Garner-Evans, E. H.	Maude, Angus	Turton, R. H.
George, Rt. Hon. Maj. G. Lloyd	Maudling, R.	Vane, W. M. F.
Godber, J. B.	Maydon, Lt.-Comdr. S. L. C.	Vaughan-Morgan. J. K.
Gomme-Duncan, Col. A.	Medlicott, Brig. F.	Vosper, D. F.

Wakefield, Edward (Derbyshire, W.)	Webbe, Sir H. (London & Westminster)	Wilson, Geoffrey (Truro)
Wakefield, Sir Wavell (Marylebone)	Wellwood, W.	Wood, Hon. R.
Walker-Smith, D. C.	White, Baker (Canterbury)	York, C.
Ward, Hon. George (Worcester)	Williams, Rt. Hon. Charles (Torquay)
Ward, Miss I. (Tynemouth)	Williams, Gerald (Tonbridge)	TELLERS FOR THE NOES:
Waterhouse, Capt. Rt. Hon. C.	Williams, Sir Herbert (Croydon, E.)	Major Conant and Mr. Redmayne.
Watkinson, H. A.	Wills, G.

The Chairman

The next Amendment, in the name of the hon. Member for Uxbridge (Mr. Beswick), in page 2, line 6, at the end, to insert: Provided that as and from the first day of October, nineteen hundred and fifty-two, there shall be allowed from the customs duty imposed by section two of the Finance Act, 1928, a rebate of sevenpence halfpenny a gallon on the delivery for home consumption of any light oils which are used as fuel in a flying machine or in connection with the manufacture and testing of flying machines. is fully covered by the following one in the name of the right hon. Member for Leeds, South (Mr. Gaitskell).

Mr. Robens

I beg to move, in page 2, line 6, at the end, to insert: (2) The provisions of subsection (1) of this section shall not apply to—

1. (a) any white spirit; or
2. (b) any light oils, other than white spirit, which are not used as fuel in mechanically propelled vehicles constructed or adapted for use on roads.

I am glad to see the Financial Secretary back in his place, and I hope he is going to deal with this Amendment because we found him so good on the previous one. I am certain that the Government have made up their minds to accept our Amendment because if we go to a Division we shall have the support of the hon. Member for Altrincham and Sale (Mr. Erroll), the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan), the hon. Member for Bury and Radcliffe (Mr. W. Fletcher) and the hon. Member for Edgbaston (Sir P. Bennett), all of whom expressed themselves on this matter in no uncertain terms.

I do not propose to make a long speech on this Amendment because we have debated this matter on more than one occasion, and I know that hon. Members on this side of the House have particular points to put about particular industries. But I want to say to the Committee that the industrial use of white spirit is widespread in many industries including paint, rubber, dyeing and cleaning, boot and floor polish, gelatine and glue making, linoleum, wallpaper, printing ink and many others. There is a whole host of uses of white spirit in industry generally, and it is important that while we are busily engaged in an export drive, and will be for many years to come, costs should be kept down as much as possible.

Whilst it may well be proved that the increase is small in relation to the total cost of the product, we must remember that all these small increases add up and probably make such an increase that the manufacturer loses his market abroad. Indeed, those engaged in the export trade today know full well how finely calculated their prices have to be if they are to get orders at all. We feel that with the tax now at 2s. 6d. a gallon we have reached a stage where in many cases the tax is nearly double the wholesale price of the basic raw materials used by such a wide range of industries, and that the time has come to look at this matter very seriously indeed to see whether or not it is possible at this stage to prevent this last increase being passed on to industry in this way.

I admit that many administrative difficulties may be raised by hon. Members opposite as reasons for not doing that, but I believe it is worth examining. It is important that we should encourage all those in industry who are struggling for export markets and trying to keep down prices on the home market by saying that we will not tax further the raw materials which they use in their manufactures.

As I have said, hon. Friends of mine will be dealing with specific industries, and, therefore, I do not want to travel over ground which they will be covering in great detail. I will end by saying that we really ought to do what we can to keep down costs, both on the export and home market, and that here is a way in which we can help those who use this spirit solely for industrial purposes in the great battle of keeping down costs.

Mr. F. Harris

While fully agreeing with all that the right hon. Member for Blyth (Mr. Robens) has just said, it seems very strange when I recall that about a year ago he and his colleagues strongly resisted identical arguments which we put forward from that side of the Committee. It once again emphasises the fact that it is very necessary for any Government to appreciate the difficulties that this extra duty is placing on manufacturers for whom white spirit is in most instances the principal commodity that they use.

In my own constituency of North Croydon we have the largest dry cleaners in the whole of the county of Surrey. They have been subjected, as have other industries, to the very heavy burden of this increased duty, which once again we are placing on their shoulders. I think everyone will agree that dry cleaning is an essential industry in modern times. This further taxation is really laying a most unfair burden upon it.

I submit that the Petrol Duty was originally intended as a tax on fuel used in the ordinary combustion engine, and most Governments still talk about it in those terms. Therefore, it seems a greater injustice to industry that this principal commodity that the chemical and paint industries use should be yearly subjected to further increases in duty. In the last two Budgets these industries have been subject to an extra 4½d. and 7½d. a gallon on white spirit, which is indeed a very heavy burden on their manufacturing costs.

The dry-cleaning industry has been very fair indeed with the public in trying to stabilise their charges. It was not until a short time ago that, after a long period of time, they were compelled to raise their charges in sheer desperation. We are reaching a stage where it is very difficult indeed for industries to pass on these extra charges. Therefore, I sincerely hope the Government may consider the situation and recognise that it can be met. After all, white spirit was free of coupons in the days of petrol rationing, so it cannot be very difficult administratively to separate it now from the oils which are subject to this additional duty.

I feel that that could be achieved, and I hope the Government will recognise that it is grossly unfair to add to this burden yearly when it could never have been originally intended that Petrol Duty should mean an extra cost to one of the principal commodities used by an industry.

Mr. Eric Fletcher (Islington, East)

I support this Amendment and I hope that in view of the support it has received already from the other side of the Committee, and no doubt the further support it will receive from other hon. Members on the Government benches, the Minister of State for Economic Affairs will be able to accept it.

It is really monstrous that this further increase in the Petrol Duty should be applied to oil used for industrial purposes and in manufacture as distinct from use in locomotion. Is there any reason for it other than the excuse that there will be administrative difficulties in making the concession for which the Amendment asks? If, as I apprehend, that is the only reason, could there be any better authority of how to deal with administrative difficulties than the Minister of Fuel and Power himself? He had a good deal to say on this subject in the debate on the Finance Bill last year.

It will be remembered that when this matter came up last year my right hon. Friend the Member for Battersea, North (Mr. Jay) made a considerable concession on this subject and moved a new Clause, which is now Section 10 of the Finance Act, 1951, designed to go some way to meet criticisms that had been made on this subject. But what did the present Minister of Fuel and Power then say about administrative difficulties?

He pointed out, on 28th June, 1951, in c. 1591 and 1592 of the OFFICIAL REPORT that practically every other industrial country in the world including, for example, the United States, Australia, South Africa, Eire, Holland, Denmark, Norway and various other countries had found no administrative difficulty whatever in exempting from the application of an increased petrol tax those who used white spirit and other hydrocarbon oils for manufacturing purposes. He pointed out with what seemed to me to be unanswerable logic that if those other countries were able to overcome administrative difficulties we should be able to do likewise.

He went on to say quite rightly that we had a very high standard of administration in these matters, but that the other countries mentioned were also well-conducted, and capable of a fair and equitable administration of rebate. It surely ought not to be beyond the wit of our efficient Civil Service to administer a system designed to exempt industrial users of these spirits for manufacturing purposes from the increasingly high burden of a tax which is designed primarily to collect revenue from those who use motor spirit for locomotive purposes.

Are we going to hear tonight from the Financial Secretary that it is these administrative difficulties which prevent him from accepting this Amendment? Is it merely the fear that there will be some abuse if this Amendment is accepted? Have the party opposite such a poor regard for the honesty and integrity of private enterprise industrialists that they think there will be great abuse if this concession is granted? No doubt, there will always be some attempt at evasion, as there must always be, but do they really say that it is beyond their capacity to devise an efficient system which will ensure that only those who have a legitimate claim to exemption will be granted exemption?

The Minister will be well aware that all kinds of safeguards can be applied by the Customs and Excise to prevent abuse. The safeguards which can be adopted are well known. Nobody would be entitled to claim exemption from duty unless proper certificates were given, duly supported if necessary by the company's accountants and auditors. There would be appropriate penalties for making improper statements. There would be opportunities for the Government to have access to the books of records of any companies claiming exemption from the duty under the proviso proposed by this Amendment. There would be all the paraphernalia which is now open to the Government to ensure that that rebate was only granted in cases where it might legitimately be claimed.

I hope we shall not hear this evening that it is these administrative difficulties which prevent the Government from giving recognition to this claim for exemption which is practically the universal demand of all manufacturers using these light hydrocarbon oils—not only the dyers and cleaners, to whom reference has been made, but the paint manufacturers, the linoleum manufacturers and those who use light hydrocarbon oils for all kinds of rubber gloves and goods.

10.15 p.m.

If the Minister should feel that he cannot do anything until the administrative machinery has been worked out which would enable him to grant the concession for which this Amendments asks, might I ask him what his Department is doing about the Section that was introduced last year at the request of the Opposition—the present Government—in order to meet the case of those manufacturers who use these light hydrocarbon oils as ingredients in various articles which are used for export? It will be remembered that the Section which was introduced by my right hon. Friend last year—Section 10—was expressly designed to ensure that at any rate throughout the whole range of the export trade persons using these light hydrocarbon oils as ingredients in goods for export should be enabled to obtain a drawback.

What use is the Minister making of that Section? It was contemplated that there would be a series of inquiries dealing with each trade, to enable them to get the benefit of the Section. My information is that no order has yet been made under the provisions of that Section. If that is so, I should like to ask why not? When will the first order be made, when will the second order be made and when will a whole series of orders be made? It is now the responsibility of the Minister to ensure that full advantage is taken of the provisions of that Section.

Surely it was not contemplated that we should have to wait a whole year before the Treasury came forward to implement the concessions which my party introduced last year? Surely it was not contemplated that these trades should be dealt with one at a time? Surely discussion could go on simultaneously with all the trades which were expected to derive benefit from drawback? I hope that the Minister will be good enough to give us some further information on that subject.

I do not limit my support of this Amendment to that narrow ground. I base it on the much wider ground that this is a concession which ought to be made and which ought not to be refused purely on the argument of administrative difficulties. If there are administrative difficulties they ought to be overcome and, as the Minister is well aware, all kinds of suggestions have been made by the industries affected to indicate how those administrative difficulties can be overcome and the various safeguards can be introduced in order to prevent any evasion if this Amendment is made.

Air Commodore A. V. Harvey (Macclesfield)

I should like to refer to the Amendment standing in the name of my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) and myself, dealing with aviation spirit supplied for use in aircraft or used in connection with the construction or testing of any engine. This evening the Financial Secretary has made a concession in respect of the flying clubs of Britain. I have never seen the reason for a tax on aviation spirits used by the airlines.

The two national Corporations—B.O.A.C. and B.E.A.C.—have for a number of years had deficits, and we have been giving money to the Corporations with one hand and taking it away with the other. It is the taxpayers' money, and there is a lot of accountancy and other work involved. Fortunately, B.O.A.C. is now out of the red, but B.E.A.C. is not yet in that happy position.

Apart from the two Corporations, the independent operators are still fighting hard to make a living, and I suspect that many of them are having considerable losses. I wonder whether it is generally realised that, on the internal air services in this country, the first five passengers boarding an aeroplane pay their fares not to the operator but to the Chancellor of the Exchequer—that is, the first five passengers on small aircraft flying in this country. It will be very difficult to build up the merchant fleet of the air if, perhaps, 25 per cent. of the passengers are paying their full fare to the Chancellor of the Exchequer.

The previous Chancellor of the Exchequer said that he could not discriminate in favour of one form of transport, but I do not think that my right hon. Friend, nor, certainly, the former Chancellor of the Exchequer, realise the position, because in air transport the consumption of fuel and its cost provide a problem which is quite different from that in the case of road vehicles.

I ask the Minister of State to bear in mind that in the air we are in a transitional stage; we are moving from pistonengined aircraft to jet engines and, as is known, jet engines use kerosene, which does not bear this tax. Within perhaps three or four years, 80 per cent. of the airliners in this country will consume kerosene. What is going to happen then? Are we to have another tax imposed on the jet airliners—a form of propulsion in which Britain is leading, building Comets for other countries and creating a great export trade? It does not make sense at all. I would refer, quite briefly, to the testing of aircraft and engines. About 60 per cent. of the aviation petrol consumed in this country is consumed in bench testing. I believe that figure has increased in the last 12 months. In 1950 the figure was 52,000 tons.

We have in this country a very great aero-engineering industry, with highly-skilled designers and craftsmen, who last year exported about £43 million worth of equipment, not in aircraft but mainly in spare parts. I believe that if they are encouraged in the right direction our exports in the next few years may reach £150 million or £200 million a year, which means that for years afterwards we shall sell large quantities of spares both for the aeroplanes and for the engines. Through this great engineering industry we may well make up what we lose on textiles and other industries.

I ask the Minister of State not to treat the matter lightly. It is important for the future economic position of the country. The sum of money involved is not great. At the moment it costs British European Airways £103,000 a year, and I am told that it costs independent operators £40,000 a year. It costs B.O.A.C. very little, because 99 per cent. of their flying is done out of Britain and they are exempt from tax for such flying. They pay tax on aviation fuel when flying from London to Prestwick en route to Canada and the United States, or perhaps in flying from Heathrow to Bristol.

I ask the Minister of State to give this matter his favourable consideration because, by so doing, he will be rendering a service to this great industry, which has such brilliant prospects.

Captain M. Hewitson (Hull, Central)

For successive years I have sought the remission of the tax on light hydrocarbon oils in so far as they affect the paint industry, and each time that I have criticised my own Front Bench, when they were on the other side of the House, I received great cheers and enthusiastic support from hon. Members opposite, including the present Front Bench, in my criticism of the then Chancellor of the Exchequer. Tonight, if they were, over the successive years, honest in their enthusiasm and their cheers, and if these Amendments were to go to a Division, one would naturally expect them to be in the Lobby supporting the Amendments and their cheers of the past.

Mr. Nabarro

And the Opposition voting against them.

Captain Hewitson

Again we shall find a promise made broken. We are getting quite used to that now, and I think that the people of the country are, too. However, tonight the Financial Secretary or the Minister of State for Economic Affairs has an opportunity of making a concession that will build up goodwill and morale in an industry which stands second to none in this country so far as good relationships go.

This appeal is being made tonight for both the trade union and the employers' sides of the industry. We have a National Joint Council on which we discuss the whole of the problems of our industry, and if one side or the other has any difficulty, there is no hesitation in calling the two sides together to put the whole of the difficulty on the table for a commonsense solution.

This appeal is being made to the Treasury to give some relief to this industry, which is one of the industries in which the labour cost is the lowest of all the industry's costs, and in which the cost of raw materials is the highest cost. This industry manufactures roughly 35 million gallons of paint per year. Paint that is directly exported in bulk carries a remission of duty for bulk export; but the major portion of the paint exported is not exported in bulk, but is exported on some other commodity such as motor cars, engineering products—indeed, every type of goods the export of which we are being asked from both sides of the Committee to build up. Tonight the Treasury has an opportunity of showing goodwill and of making an attempt to reduce the costs of a primary, basic commodity.

Tomorrow there will be a meeting of the Joint Council of the paint industry, and tomorrow, in all probability, I think, notice will be given of a demand for an increase in wages in the paint industry to meet the rising cost of living. Here is an opportunity for the Chancellor or the Minister of State for Economic Affairs or the Financial Secretary to show some measure of goodwill to the industry that will probably have far-reaching effects tomorrow on the arguments that will be put forward. It could be a genuine effort on the part of the Treasury to lower the costs of production.

We have been told to produce more, work harder, use new types of machines, and do all manner of things in mass production to bring down costs. An opportunity is here tonight for the giving of some assistance by the Treasury in that direction. It may be said that administrative difficulties stand in the way, but already the paint industry has submitted to the Treasury a scheme to avoid abuse and to help the administration of any scheme of rebate on light hydrocarbon oils used in the manufacture of paint.

10.30 p.m.

Other countries have administrative difficulties greater than ours. In America the administrative machine is not nearly as simple as ours, yet they have found ways of rebate for light hydrocarbon oils in industry. They have found means in Canada. They have found means in two countries that are just rebuilding their economic systems, Germany and Italy. Germany especially will become a competitor of ours on the world markets, and relief has already been given in the taxation of light hydrocarbon oils used in industry.

In other countries such as Australia and South Africa tax differentials have been granted in this direction. Since the war Belgium, The Netherlands, Luxembourg, Norway and Finland have given tax rebates on the use of light hydrocarbon oils in industry. So surely it is just a commonsense argument that we in this great country, with our great possibilities, should have a Government that will give every possible help to industry and to production for export, because it is only by exporting that we can live. Tonight is the opportunity. Tonight we can have some aid given to industry which will really help it.

Ever since the original duty of 4d. a gallon was levied on light hydrocarbon oils it has not been understood. It was not meant at that time that this tax should become a burden on industry generally. It was a road tax at the beginning. Yet today we have the unhappy position that while Purchase Tax on luxury articles is 100 per cent., the tax on light hydrocarbon oils used in paint manufacture is 175 per cent. on the wholesale price. Purchase Tax is 100 per cent. on luxury fur coats and the like, but a commodity which is essential to all industry, paint, bears a tax of 175 per cent. on the basic material that goes into it.

That is wrong. That is ridiculous. One could call it outrageous because in itself it is a demonstration that industry is not receiving very much help. I repeat: tonight presents an opportunity. We may be told that with a production of 35 million gallons per year the reduction of 1s. per gallon suggested in my Amendment would mean £1¾ million per annum rebate in tax. But already there is a rebate on bulk exports, so it ought to be something less than that figure. But even £1¾ million would be a welcome rebate to the industry, and it would be an encouragement to the country for increased production at a lower cost.

It may be argued that we cannot afford it. But if the trade union at the meeting tomorrow serves notice for an increase in wages of a substantial character, and press for that increase, and—I repeat what I said a short while ago in the House—they will not take "No" for an answer, it will cost more than that overall per annum.

We have given support in the trade union world to various Ministers, including the Chancellor in his appeal. We have had inside conferences and heart to heart talks to examine our difficulties, and, indeed, when the Chancellor was making his Budget speech, standing behind the Chair when he was talking of trades unions and their counsels I could feel a halo forming round my head so kind were his words and so lavish his opinion of trade union leaders.

Here he has an opportunity to do something or to advise the Minister for Economic Affairs to do something—

Mr. Anthony Fell (Yarmouth)

I should like to ask one question that has reference to the meeting tomorrow. What is the connection between the hon. and gallant Gentleman's Amendment and the trade union meeting that is to take place tomorrow?

Captain Hewitson

The meeting tomorrow is not a trade union meeting. It is a meeting of the Joint Council which embraces both sides of the industry, and consideration is to be given to the question of whether or not there should be an application for an increase in wages.

This pernicious tax and any wage increase would mean that the price of raw materials and the costs of labour would rise, so that the finished product would also rise in cost. A substantial wage increase would mean that there would be a considerable increase in the cost of the finished product. Rising costs of labour and materials are making the position well nigh impossible for our manufacturers, who are also forced to face increasing competition from countries like Germany, whose firms get rebates to keep the cost of the product down.

A token effort can be made by the acceptance of this Amendment. The right hon. Gentleman has already had a conference suggesting that there should be some form of wage standstill, or if not that a toning down of wage demands. The right hon. Gentleman is still waiting for a reply to that. The right hon. Gentleman can give an example by a display of willingness on the part of the Treasury to assist this industry, but if no help is forthcoming—

Mr. Arthur Colegate (Burton)

I should like help from the hon. and gallant Gentleman to follow his argument. Is he claiming that if the Chancellor gives way on this Amendment then there will be no wage claim tomorrow?

Captain Hewitson

It would be very wrong of me to say that if the Chancellor gives a concession tonight there will be no wage claim, and that if he does not give way we shall go to the limit. What I am suggesting is that the Chancellor should make a token effort to help an industry, and so strengthen the hands of the trade union leaders who are facing their own members, because they could then point to the fact that efforts were being made to keep production costs down.

Mr. Fell

I want information on this point from the hon. and gallant Gentleman, and I hope that he will try to satisfy the Committee about this. When I asked him what connection there was between these two things he explained, reasonably enough, that wages plus the cost of this tax would increase the price of the product. He has answered my hon. Friend the Member for Burton (Mr. Colegate) by saying that it would be wrong for him to suggest anything about what would be the result of the negotiations tomorrow. How can he then claim that there would then in fact be an increased cost because of increased wages? What is the point of this argument?

Captain Hewitson

I wish the hon. Member would be sitting at the table tomorrow, and he would realise the point of the argument.

I am simply trying to explain that if a gesture was made by the Treasury by way of relief to this industry, it would have a moral effect in persuading the men and women in the workshops that here was an attempt by H.M. Government to keep down the overall costs of the finished product by way of a remission of taxation. If that was made—if this gesture was given—then we, as trade union leaders, could argue that the demands from the workshop level should not be so great in order that we should give a quid pro quo towards keeping down production costs.

Mr. Fell

The argument then, is that at this meeting, the hon. and gallant Member will say that the Treasury must act as he wishes? That is surely a bargain.

Captain Hewitson

I would not bargain; that would be morally dishonest. If I may try to explain again, I would say that I am making an attempt to show that if the Treasury Bench made a gesture here tonight to the industry, it would show goodwill from the Government side; and, after all, goodwill is not a one-way traffic. If goodwill is shown from the Treasury Bench, then it can also be shown by those in the workshops of the industry as well. Paint is an example of how that can be done.

Remissions have been given for other types of oil. It is illogical that since Diesel oil and oils for non-transport purposes were exempted from duty in October 1946, that kerosene, including vaporising oil for farm tractors, were exempted in 1947, and that light hydrocarbon oils used in the finishing industries were also exempted, that there should not be a remission of tax for this industry. We are told about the administrative difficulties, but it has not been found impossible for the administrative machine to find a means of drawback of tax for other industries; and, in view of the fact that the paint industry has put in a plan to the Treasury explaining how this can be done administratively, an effort should be made by the Treasury to implement the scheme.

If there can be no promise tonight of any alteration, will the Financial Secretary say that he will consider the matter between now and the Report stage of the Bill? If the Treasury would do something of that description, it will help the buildup of goodwill in an industry which has become noted over the past forty years for its high standard of good industrial relationship.

10.45 p.m.

Sir A. Salter

We have had this evening a few samples of the great complexity of the British economic system, and incidentally, some indication of the complexity which would necessarily be attached to any system of drawback extended over the whole area of those industries using any form of light oil.

On an earlier Amendment we dealt with a proposal for the exemption of heavy oils. Now we have an Amendment proposing, except in the case of read traffic, to give complete exemption to all light oils. To go into great detail on every industry mentioned, and still more, to go into the case of every industry involved which has not been mentioned would be difficult and lengthy. I will refer to one or two, but I think it important to have the general purpose and principle of the duty clearly in our minds.

I do not think it can be better put than it was by the right hon. Member for Battersea, North (Mr. Jay) last year. He said: I fully agree that one must consider very carefully before imposing any increase in tax on any industrial material. … But the fact is that this tax on light hydrocarbon oils was never intended, as is sometime erroneously supposed, as simply a tax on road transport. Indeed the classical statement of the orthodox doctrine about this tax was enunciated by"— the present Prime Minister. The right hon. Gentleman then quoted from the present Prime Minister, who said in answer to various pleas for exemption: 'If you start to give these exemptions you will end by attempting to confine the burden of the Petrol Duty exclusively to the road user.' Then, after quoting certain instances, the present Prime Minister said: 'If you did that, you would, undoubtedly, have vitiated the tax. … You will have undoubtedly destroyed the tax. …'"—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 884.] That tax brings in some £270 million—not the part affected by the present Amendment, but the tax as a whole.

Perhaps anticipating that his remarks would be quoted, the right hon. Member for Battersea, North said earlier that his argument in relation to a tax at the time when it was 1s. 10½d. was not the same as in relation to a tax at 2s. 6d. That is true, and that was a very relevant point to make when discussing the general height of this tax. But when we are looking at the reasons he gave for not giving this particular kind of relief in the form of drawbacks to other industries using light oils I cannot think his arguments of last year are substantially weakened in effect by the fact that we are now discussing a tax at 2s. 6d. a gallon instead of 1s. 10½d.

Having said that, I am bound, in giving reasons why I am unable to accept this Amendment, to place a good deal of importance on the administrative reason to which the hon. Member for Islington, East (Mr. E. Fletcher) referred. Some drawbacks are relatively easy to administer and some are much more complicated. Some would have a great deal of financial effect and in some cases it would be hardly worth while for an industrialist to claim, or perhaps just worth while, but at an expense to himself that deprives him of a large part of the benefit, and an expense which is matched, or is greater, in the case of the officials concerned in collecting the tax.

For example, think of the complexities involved in the case of my hon. Friend, the Member for Croydon, North (Mr. F. Harris)—the dry cleaners. Think of the staff required and the complexity of the system required to have inspecting officers at every dry-cleaning establishment in the country, for what is really not a very important part of their costs.

Mr. Beswick

Could the right hon. Gentleman say how he applies this argument to the operators of aircraft, who already get a drawback in respect of aircraft that go overseas—operators who are comparatively few in number?

Sir A. Salter

The financial advantage and the administrative simplicity are very much greater in some cases than in others. Administratively it would be easier in relation to aircraft, certainly, but this is a general Amendment which covers a vast number of cases where the difficulties would be greater and the financial advantages less.

Mr. Beswiek

It is a general Amendment, but we are discussing also the point of one or two other Amendments, one of which is very particular. It is an Amendment which hon. Gentlemen opposite are apparently going to support with us, in the Lobby, against the Government. As the right hon. Gentleman said, it is not the administrative difficulties that cause him to hesitate on this case but the financial advantages. There are absolutely no financial advantages in the tax on aviation fuel, because the Government hand back what they collect in the form of subsidy.

Air Commodore Harvey

Hon. Gentlemen opposite did not support us in the Lobby last time.

Sir A. Salter

I will continue with my argument. The hon. Member for Islington, East said—it was a perfectly clear point, to which I do not profess I can give a complete answer—that other countries do this. It is quite true that in some other countries there is this drawback system; it is also true that in some of them the drawback system is administered in a rough and ready way that means, for example, depriving the great bulk of the small people of the advantages, because of the enormous administrative difficulties.

Apart from administrative costs and difficulties both to the individual claiming drawbacks and to the officials concerned in seeing they are legitimately claimed, no amount of administrative supervision would ever be able to avoid a very considerable abuse. A number of these oils can quite easily be used, and it is very difficult to detect their use, for road traffic. Even with an expensive system of administration there would still be a good deal of abuse.

Mr. E. Fletcher

Is the right hon. Gentleman really saying that this country cannot adopt the solution that has been found in other great industrial countries, apparently with great success and satisfaction, for overcoming this problem; and will not the Minister study the way the United States, France and Australia deal with this problem?

Sir A. Salter

We think that, covering the whole range of these industries, in many cases it would involve a quite disproportionate amount of expense and inconvenience for the result obtained.

Where there is a special case in which it is in the national interest that any particular form of our economy should have special encouragement—and I fully understand the arguments of my hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) about various forms of air transport—we do not think that, as a rule, the best way is to give special exemptions by way of drawbacks to particular taxes so that there is a whole series of half-concealed subsidies or preferences. We have had instances where a particular class of the community has had a special claim for relief of some kind and has received it in a special form. But we think the anomalies and difficulties of a general drawback system of this kind are too great to make it practicable.

Air Commodore Harvey

Does my right hon. Friend realise that there are probably only 40 or 50 commercial aircraft operating in Britain? Arising from what he has said has he in mind giving them another subsidy? This small industry needs propping up if we are to make a go of it.

Mr. Hewitson

Would the right hon. Gentleman tell the Committee what some of the administrative difficulties would be?

Sir A. Salter

I cannot go into the particular administrative system that would be required for each of the many industries that would be affected. I did not say that the administrative difficulties would be insuperable in the case that my hon. and gallant Friend the Member for Macclesfield had in mind because I was arguing with regard to the general Amendment which, of course, refers to all industries which make use of these light oils. A drawback in the case he raised would give a strong case for extension to the whole range covered by this Amendment and I think that that method of helping that part of the economy is not really desirable for reasons which have been given and repeated by successive Governments for a long time.

The right hon. Gentleman the Member for Battersea, North and the Member for Islington, East asked what is being done with regard to the new Section which the right hon. Gentleman introduced last year to extend the drawback in the case of exports. The preparation of drawback orders under the new provision of the Act last year for export goods where oil is used as a solvent has proved to be a very long and complicated business. By agreement with the trade interests it was arranged to deal first with the trade in certain rubber articles—gloves, raincoats and other articles where the amount of oil used is considerable. Apart from the possible exception of motor cars, oil used in paint on exported goods is such a trivial part of the cost that firms have not shown much keenness to have a drawback order.

Discussions on this point have now reached an advanced stage and it is expected that a Treasury Order will be laid before the House very shortly affecting the goods to which I have referred—raincoats and so on. That will not necessarily be the last order, but I cannot say that the orders will ultimately cover all the goods which the right hon. Gentleman had in mind when he introduced this section last year. I wish I could have gone more fully into all the interesting cases put forward for the paint industry, the aircraft industry and so on, but I do not think the Committee would wish me to do so at the moment. I am afraid that for the reasons I have mentioned it is not possible for us to accept the Amendment.

11.0 p.m.

Mr. Ede (South Shields)

We have heard the right hon. Gentleman's answer with very considerable disappointment. I had hoped that the plea made by the hon. Gentleman for Croydon, North (Mr. Frederic Harris) would have moved him because, as in his case, I am particularly concerned with one of the dye works. So far as the hon. Gentleman is concerned it is a case of now or never. If the hon. Member will go into the Lobby against the Government on this issue, he would be surprised at the success that would attend his future efforts on this Bill, because it would indicate that he means what he says. [An HON. MEMBER: "What about last year?"] I did not speak last year, and I do not intend to speak for very long tonight because I am anxious it shall not be said that, on this particular Amendment, and the one before, the Chancellor was obstructed by this side of the Committee in trying to get Clause 1 by 11.30 tonight—a point on which we are exceedingly anxious to help him.

This white spirit could, I would have thought, have been quite easily distinguished. It has a different flash-point from the oil used in the main for road purposes. It has a flash-point above 73 degrees Fahrenheit and a distillation range of from 140 to 200 degrees centigrade. Motor spirit has a flash point much below 73 degrees Fahrenheit. In fact, I recollect at the beginning of this century what is now regarded as the valuable low flash point of this oil was regarded as a very considerable menace in homes. White spirit, in those days, sold very cheaply, and was used in lamps which had the unenviable habit of exploding and involving children clad in inflammable garments in accidents which sometimes resulted in death.

There appears to me no reason why a quite easy physical test could not be applied to the oils covered in the Amendment moved by my right hon. Friend the Member for Blyth (Mr. Robens). I do want to press on the Chancellor of the Exchequer and hon. Members opposite the desirability of assisting the industry that was particularly alluded to by the hon. Member for Croydon, North, because this dry cleaning industry is carried out either in white spirit or a synthetic solvent, but the greatest part of the work is cleaned in white spirit. This is a growing industry, due very largely to the increasing desire of people to have not too many suits of clothes and to ensure that they can present themselves at work in a reasonably clean condition.

The number of persons in the industry in June this year was given as 42,000, nearly all of them in the white spirit using plants. Prices in the industry, as the hon. Member for Croydon, North, said, have risen by approximately only 45 per cent. over pre-war, and compared with practically every other industry in the country and every other industry concerned with clothing, this shows a very reasonable attitude on the part of the people who run the industry. If this additional tax is put on, it is quite clear there will have to be substantial increases in the amounts charged.

There is no doubt that this tax is regarded as a petrol tax. That is what everyone calls it, and people who do not follow the matter closely are surprised to find that things like the cleaning of clothes by high flash point spirit are subject to this tax which they had regarded as a petrol tax. It is serious enough, in all conscience, as a petrol tax; but I do suggest that it is possible to distinguish between this spirit and the petrol which is used on the roads for propulsive purposes.

To me it seems unfair and illogical to hamper this branch of industry, which, I know, endeavours to supply something which the country needs at a cost which compares with those of practically every other trade in the same category. Thus it represents a genuine effort to help the public and not to take advantage of the general rise in prices.

I hope that between now and the Report stage the Chancellor of the Exchequer who, I know, has a mind which is always open to reason, will consider not merely the economic arguments which have been used, but the falsity of the argument used by the Economic Secretary—that it is impossible to distinguish between this spirit and others—which come within the range of this tax. I hope that my hon. Friends will show their dissatisfaction with the right hon. Gentleman's reply by recording their votes in the Lobby, supported by the hon. Member for Croydon, North, and others who were disappointed with the action which we took last year.

Mr. F. Erroll (Altrincham and Sale)

Over a number of years, now, I have heard the case of the Civil Service responsible for administering this tax put forward from the Despatch Box, first by Socialist Ministers, and now by a Conservative Minister. I can only say that the case put forward by the Conservative Minister was less convincing than that of the Socialist Minister. That is why I feel that there are real grounds for hope that next year we shall see many of the concessions introduced in the 1953 Finance Bill which we have been urging for a number of years.

As the hour is late, I only wish to put it to my hon. Friends on this side that we should not delay the Committee but should go into the Lobby against the Amendment this year, confident that between now and a later stage we shall have time to persuade our colleagues on the Front Bench of the merits of a case which, due to many factors they have not had proper time to consider in their few months in office. I hope that they will consider our representations during the coming months.

Mr. A. Fenner Brockway (Eton and Slough)

Even at this late hour I want to appeal to the Chancellor of the Exchequer to reconsider the decision which has been announced tonight. I do not think there is any doubt that if the Members of the Committee were able to vote tonight according to their convictions the Amendment would be carried. If hon. Members on the other side twit us with not supporting the Amendment last year, I will say that, personally, I should be satisfied if they would do tonight what I did last year. Last year, because I was opposed to this tax, I abstained from voting, and if hon. Members opposite will abstain from voting on this occasion we will carry this Amendment tonight.

Last year I was disturbed because in my constituency, where there are very many light industries, I had had heavy correspondence on this matter; but the correspondence which I had last year from these industries is nothing compared with the correspondence which is now in my hands. I shall not delay the Committee by citing the cases which I have here, but there are cases not only of rubber industries, paint industries and dry-cleaning industries but very many light industries upon which both our export market and our home market depend.

My appeal to right hon. Gentlemen opposite—and particularly the Chancellor of the Exchequer—is not to be content with the suggestion which has been made that this matter should be reconsidered during the next 12 months, but that it should be reconsidered between now and the Report stage, and that a concession which would be in accordance with the views of the majority of hon. Members on both sides of the Committee should be given when the Report stage is reached.

Mr. E. Fernyhough (Jarrow)

I am quite sure that hon. Members on both sides of the Committee are very disappointed with the reply of the Minister of State for Economic Affairs. He can plead that it was administratively impossible to meet our desires on this Amendment, but "where there's a will there's a way." The Government have recently found it administratively possible to introduce a scheme for charges in the Health Service, and that is a much bigger problem than the administrative difficulty that meets the purpose of this Amendment.

I should like to ask whether the Chancellor of the Exchequer has considered the repercussions of this additional tax—even as far as the Minister of Housing and Local Government is concerned. It means that every one of the 300,000 houses that will some day go up will cost more. I should also like to say a word about its effects upon certain industries within my constituency. Probably two of the biggest users of paint are shipbuilding and ship repairing industries, which are finding growing competition from both Germany and Japan. Anything that adds to their production costs is going to make it more difficult for them to get the orders which will mean full employment in the shipbuilding yards.

Another fact that has to be considered is that it will put up the price of paint internally and thus probably lessen demand and it means that those employed in the industry will become the less secure because of it. Many of the paint factories are situated in areas where there is no alternative employment; so it will not be possible to switch the manpower—as the Chancellor would like some employees to be switched—to work in connection with the re-armament programme. For those reasons I hope that the plea of my hon. and gallant Friend the Member for Hull, Central (Captain Hewitson), that this

matter will be reconsidered between now and the Report stage, will fall upon willing ears and that we shall get better news when the Report stage is reached.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 239 Noes, 254.

Division No. 109.]	AYES	[11.15 p.m.
Acland, Sir Richard	Fletcher, Eric (Islington, E.)	Mayhew, C. P.
Adams, Richard	Follick, M.	Mellish, R. J.
Albu, A. H.	Foot, M. M.	Messer, F.
Allen, Arthur (Bosworth)	Forman, J. C.	Mikardo, Ian
Attlee, Rt. Hon. C. R.	Fraser, Thomas (Hamilton)	Mitchison, G. R.
Awbery, S. S.	Freeman, John (Watford)	Monslow, W.
Bacon, Miss Alice	Freeman, Peter (Newport)	Moody, A. S.
Baird, J.	Gaitskell, Rt. Hon. H. T. N.	Morgan, Dr. H. B. W.
Balfour, A.	Gibson, C. W.	Morley, R.
Bellenger, Rt. Hon. F. J.	Glanville, James	Morris, Percy (Swansea, W.)
Bence, C. R.	Gooch, E. G.	Morrison, Rt. Hon. H. (Lewisham, S.)
Benn, Wedgwood	Gordon Walker, Rt. Hon. P. C.	Moyle, A.
Benson, G.	Greenwood, Anthony (Rossendale)	Mulley, F. W.
Beswick, F.	Greenwood, Rt. Hon. Arthur (Wakefield)	Murray, J. D.
Bevan, Rt. Hon. A. (Ebbw Vale)	Grey, C. F.	Neal, Harold (Bolsover)
Bing, G. H. C.	Griffiths, David (Rother Valley)	Noel-Baker, Rt. Hon. P. J.
Blackburn, F.	Griffiths, Rt. Hon. James (Llanelly)	Oliver, G. H.
Blyton, W. R.	Griffiths, William (Exchange)	Orbach, M.
Boardman, H.	Grimond, J.	Oswald, T.
Bottomley, Rt. Hon. A. G.	Hale, Leslie (Oldham, W.)	Padley, W. E.
Bowden, H. W.	Hall, Rt. Hon. Glenvil (Colne Valley)	Paling, Rt. Hon. W. (Dearne Valley)
Bowen, E. R.	Hall, John (Gateshead, W.)	Paling, Will T. (Dewsbury)
Braddock, Mrs. Elizabeth	Hamilton, W. W.	Pannell, Charles
Brockway, A. F.	Hannan, W.	Pargiter, G. A.
Brook, Dryden (Halifax)	Hargreaves, A.	Parker, J.
Broughton, Dr. A. D. D.	Hayman, F. H.	Peart, T. F.
Brown, Rt. Hon. George (Belper)	Healey, Denis (Leeds, S.E.)	Plummer, Sir Leslie
Brown, Thomas (Ince)	Henderson, Rt. Hon. A. (Rowley Regis)	Porter, G.
Burke, W. A.	Hewitson, Capt. M.	Price, Joseph T. (Westhoughton)
Burton, Miss F. E.	Hobson, C. R.	Price, Philips (Gloucestershire, W.)
Butler, Herbert (Hackney, S.)	Holman, P.	Proctor, W. T.
Callaghan, L. J.	Holt, A. F.	Pryde, D. J.
Carmichael, J.	Houghton, Douglas	Pursey, Cmdr. H.
Castle, Mrs. B. A.	Hoy, J. H.	Reeves, J.
Champion, A. J.	Hudson, James (Ealing, N.)	Reid, Thomas (Swindon)
Chapman, W. D.	Hughes, Cledwyn (Anglesey)	Rhodes, H.
Chetwynd, G. R.	Hughes, Emrys (S. Ayrshire)	Robens, Rt. Hon. A.
		Roberts, Albert (Normanton)
Clunie, J.	Hughes, Hector (Aberdeen, N.)	Roberts, Goronwy (Caernarvonshire)
Cocks, F. S.	Hynd, H. (Accrington)	Rogers, George (Kensington, N.)
Coldrick, W.	Hynd, J. B. (Attercliffe)	Ross, William
Collick, P. H.	Irvine, A. J. (Edge Hill)	Royle, C.
Cook, T. F.	Irving, W. J. (Wood Green)	Schofield, S. (Barnsley)
Corbet, Mrs. Freda	Janner, B.	Shackleton, E. A. A.
Craddock, George (Bradford, S.)	Jay, Rt. Hon. D. P. T.	Shawcross, Rt. Hon. Sir Hartley
Crosland, C. A. R.	Jeger, George (Goole)	Shinwell, Rt. Hon. E.
Cullen, Mrs. A.	Jenkins, R. H. (Stechford)	Short, E. W.
Dalton, Rt. Hon. H.	Johnson, James (Rugby)	Silverman, Julius (Erdington)
Darling, George (Hillsborough)	Johnston, Douglas (Paisley)	Simmons, C. J. (Brierley Hill)
Davies, A. Edward (Stoke, N.)	Jones, David (Hartlepool)	Slater, J.
Davies, Ernest (Enfield, E.)	Jones, Frederick Elwyn (West Ham, S.)	Smith, Ellis (Stoke, S.)
Davies, Harold (Leek)	Jones, Jack (Rotherham)	Sorensen, R. W.
Deer, G.	Jones, T. W. (Merioneth)	Soskice, Rt. Hon. Sir Frank
Delargy, H. J.	Keenan, W.	Sparks, J. A.
Dodds, N. N.	Key, Rt. Hon. C. W.	Steele, T.
Donnelly, D. L.	King, Dr. H. M.	Stewart, Michael (Fulham, E.)
Driberg, T. E. N.	Lee, Miss Jennie (Cannock)	Stokes, Rt. Hon. R. R.
Dugdale, Rt. Hon. John (W. Bromwich)	Lever, Leslie (Ardwick)	Strachey, Rt. Hon. J.
Ede, Rt. Hon. J. C.	Lewis, Arthur	Strauss, Rt. Hon. George (Vauxhall)
Edelman, M.	Lindgren, G. S.	Summerskill, Rt. Hon. E.
Edwards, John (Brighouse)	McGhee, H. G.	Swingler, S. T.
Edwards, Rt. Hon. Ness (Caerphilly)	McInnes, J.	Sylvester, G. O.
Edwards, W. J. (Stepney)	McKay, John (Wallsend)	Taylor, Bernard (Mansfield)
Evans, Albert (Islington, S.W.)	McLeavy, F.	Taylor, John (West Lothian)
Evans, Edward (Lowestoft)	McNeil, Rt. Hon. H.	Taylor, Rt. Hon. Robert (Morpeth)
Evans, Stanley (Wednesbury)	MacPherson, Malcolm (Stirling)	Thomas, David (Aberdare)
Ewart, R.	Mainwaring, W. H.	Thomas, George (Cardiff)
Fernyhough, E.	Mallalieu, E. L. (Brigg)	Thomas, Iorwerth (Rhondda, W.)
Field, W. J.	Mallalieu, J. P. W. (Huddersfield, E.)	Thomas, Ivor Owen (Wrekin)
Fienburgh, W.	Manuel, A. C.	Tomney, F.
Finch, H. J.	Marquand, Rt. Hon. H. A.	Turner-Samuels, M.
Ungoed-Thomas, Sir Lynn	White, Henry (Derbyshire, N.E.)	Williams, W. T. (Hammersmith, S.)
Usborne, H. C.	Whiteley, Rt. Hon. W.	Wilson, Rt. Hon. Harold (Huyton)
Wade, D. W.	Wigg, George	Winterbottom, Ian (Nottingham, C.)
Wallace, H. W.	Wilkins, W. A.	Winterbottom, Richard (Brightside)
Watkins, T. E.	Willey, Frederick (Sunderland, N.)	Woodburn, Rt. Hon. A.
Weitzman, D.	Willey, Octavius (Cleveland)	Wyatt, W. L.
Wells, William (Walsall)	Williams, David (Neath)	Yates, V. F.
West, D. G.	Williams, Rev. Llywelyn (Abertillery)	Younger, Rt. Hon. K.
Wheatley, Rt. Hon. John	Williams, Ronald (Wigan)	TELLERS FOR THE AYES:
White, Mrs. Eirene (E. Flint)	Williams, W. R. (Droylsden)	Mr. Pearson and Mr. Horace Holmes.
NOES
Allan, R. A. (Paddington, S.)	Erroll, F. J.	Mackeson, Brig. H. R.
Alport, C. J. M.	Fell, A.	McKibbin, A. J.
Amery, Julian (Preston, N.)	Finlay, Graeme	McKie, J. H. (Galloway)
Amory, Heathcoat (Tiverton)	Fisher, Nigel	MacLeod, Iain (Enfield, W.)
Anstruther-Gray, Major W. J.	Fleetwood-Hesketh, R. F.	Macmillan, Rt. Hon. Harold (Bromley)
Arbuthnot, John	Fletcher-Cooke, C.	Macpherson, Maj. Niall (Dumfries)
Ashton, H. (Chelmsford)	Fort, R.	Maitland, Comdr. J. F. W. (Horncastle)
Assheton, Rt. Hon. R. (Blackburn, W.)	Foster, John	Maitland, Patrick (Lanark)
Astor, Hon. J. J. (Plymouth, Sutton)	Fraser, Sir Ian (Morecambe & Lonsdale)	Manningham-Buller, Sir R. E.
Astor, Hon. W. W. (Bucks, Wycombe)	Gage, C. H.	Markham, Major S. F.
Baker, P. A. D.	Galbraith, Cmdr. T. D. (Pollok)	Marlowe, A. A. H.
Baldock, Lt.-Cmdr. J. M.	Gammans, L. D.	Marples, A. E.
Baldwin, A. E.	Garner-Evans, E. H.	Marshall, Douglas (Bodmin)
Barber, A. P. L.	Godber, J. B.	Marshall, Sidney (Sutton)
Baxter, A. B.	Gomme-Duncan, Col. A.	Maude, Angus
Beach, Maj. Hicks	Gower, H. R.	Maudling, R.
Bell, Philip (Bolton, E.)	Graham, Sir Fergus	Maydon, Lt.-Comdr. S. L. C.
Bell, Ronald (Bucks, S.)	Gridley, Sir Arnold	Medlicott, Brig. F.
Bennett, F. M. (Reading, N.)	Grimston, Hon. John (St. Albans)	Mellor, Sir John
Bennett, Dr. Reginald (Gosport)	Grimston, Sir Robert (Westbury)	Molson, A. H. E.
Bevins, J. R. (Toxteth)	Harden, J. R. E.	Monckton, Rt. Hon. Sir Walter
Birch, Nigel	Hare, Hon. J. H.	Morrison, John (Salisbury)
Bishop, F. P.	Harris, Frederic (Croydon, N.)	Mott-Radclyffe, C. E.
Black, C. W.	Harris, Reader (Heston)	Nabarro, G. D. N.
Boothby, R. J. G.	Harrison, Col. J. H. (Eye)	Nicholls, Harmar
Boyd-Carpenter, J. A.	Harvey, Air Cdre. A. V. (Macclesfield)	Nicolson, Nigel (Bournemouth, E.)
Boyle, Sir Edward	Harvey, Ian (Harrow, E.)	Nield, Basil (Chester)
Braine, B. R.	Hay, John	Noble, Cmdr. A. H. P.
Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)	Head, Rt. Hon. A. H.	Nutting, Anthony
Brooke, Henry (Hampstead)	Heald, Sir Lionel	Oakshott, H. D.
Brooman-White, R. C.	Heath, Edward	Odey, G. W.
Browne, Jack (Govan)	Higgs, J. M. C.	O'Neill, Rt. Hon. Sir H. (Antrim, N.)
Buchan-Hepburn, Rt. Hon. P. G. T.	Hill, Mrs. E. (Wythenshawe)	Orr, Capt, L. P. S.
Bullard, D. G.	Hirst, Geoffrey	Orr-Ewing, Charles Ian (Hendon, N.)
Bullock, Capt. M.	Hollis, M. C.	Osborne, C.
Belles, Wing Commander E. E.	Hopkinson, Henry	Partridge, E.
Burden, F. F. A.	Hornsby-Smith, Miss M. P.	Perkins, W. R. D.
Butcher, H. W.	Horobin, I. M.	Peto, Brig. C. H. M.
Butler, Rt. Hon. R. A. (Saffron Walden)	Howard, Gerald (Cambridgeshire)	Peyton, J. W. W.
Carr, Robert (Mitcham)	Howard, Greville (St. Ives)	Pilkington, Capt. R. A.
Carson, Hon. E.	Hudson, Sir Austin (Lewisham, N.)	Pitman, I. J.
Cary, Sir Robert	Hudson, W. R. A. (Hull, N.)	Powell, J. Enoch
Channon, H.	Hurd, A. R.	Price, Henry (Lewisham, W.)
Churchill, Rt. Hon. W. S.	Hutchinson, Sir Geoffrey (Ilford, N.)	Prior-Palmer, Brig. O. L.
Clarke, Col. Ralph (East Grinstead)	Hutchison, Lt.-Com. Clark (E'b'rgh W.)	Profumo, J. D.
Clarke, Brig. Terence (Portsmouth, W.)	Hutchison, James (Scotstoun)	Raikes, H. V.
Clyde, Rt. Hon. J. L.	Hyde, Lt.-Col. H. M.	Rayner, Brig. R.
Cole, Norman	Hylton-Foster, H. B. H.	Redmayne, M.
Colegate, W. A.	Jenkins, R. C. D. (Dulwich)	Remnant, Hon. P.
Conant, Maj. R. J. E.	Johnson, Eric (Blackley)	Renton, D. L. M.
Cooper, Sqn. Ldr. Albert	Jones, A. (Hall Green)	Roberts, Peter (Heeley)
Cooper-Key, E. M.	Joynson-Hicks, Hon. L. W.	Robertson, Sir David
Craddock, Beresford (Spelthorne)	Kaberry, D.	Robinson, Roland (Blackpool, S.)
Cranborne, Viscount	Keeling, Sir Edward	Robson-Brown, W.
Crookshank, Capt. Rt. Hon. H. F. C.	Kerr, H. W. (Cambridge)	Rodgers, John (Sevenoaks)
Crosthwaite-Eyre, Col. O. E.	Lambert, Hon. G.	Roper, Sir Harold
Crouch, R. F.	Lambton, Viscount	Ropner, Col. Sir Leonard
Crowder, Petre (Ruislip—Northwood)	Lancaster, Col. C. G.	Russell, R. S.
Darling, Sir William (Edinburgh, S.)	Leather, E. H. C.	Ryder, Capt. R. E. D.
Davidson, Viscountess	Legge-Bourke, Maj. E. A. H.	Salter, Rt. Hon. Sir Arthur
Deedes, W. F.,	Legh, P. R. (Petersfield)	Schofield, Lt.-Col. W. (Rochdale)
Digby, S. Wingfield	Lindsay, Martin	Scott, R. Donald
Dodds-Parker, A. D.	Linstead, H. N.	Scott-Miller, Cmdr. R.
Donaldson, Cmdr. C. E. McA.	Lloyd, Maj. Guy (Renfrew, E.)	Shepherd, William
Donner, P. W.	Lloyd, Rt. Hon. Selwyn (Wirral)	Simon, J. E. S. (Middlesbrough, W.)
Douglas-Hamilton, Lord Malcolm	Lockwood, Lt.-Col. J. C.	Smiles, Lt.-Col. Sir Walter
Drayson, G. B.	Longden, Gilbert (Herts, S.W.)	Smithers, Peter (Winchester)
Dugdale, Maj. Rt. Hn. Sir T. (Richmond)	Low, A. R. W.	Smyth, Brig. J. G. (Norwood)
Duncan, Capt. J. A. L.	Lucas, Sir Jocelyn (Portsmouth, S.)	Soames, Capt. C.
Duthie, W. S.	Lucas, P. B. (Brantford)	Spearman, A. C. M.
Eden, Rt. Hon. A.	Lucas-Tooth, Sir Hugh	Speir, R. M.
Elliot, Rt. Hon. W. E.	Macdonald, Sir Peter (I. of Wight)	Spence, H. R. (Aberdeenshire, W.)

Stanley, Capt. Hon. Richard	Thorneycroft, R. Hn. Peter (Monmouth)	Watkinson, H. A.
Stevens, G. P.	Thornton-Kemsley, Col. C. N.	Webbe, Sir H. (London & Westminster)
Stewart, Henderson (Fife, E.)	Tilney, John	Wellwood, W.
Stoddart-Scott, Col. M.	Turner, H. F. L.	White, Baker (Canterbury)
Strauss, Henry (Norwich, S.)	Turton, R. H.	Williams, Gerald (Tonbridge)
Stuart, Rt. Hon. James (Moray)	Vane, W. M. F.	Williams, Sir Herbert (Croydon, E.)
Summers, G. S.	Vaughan-Morgan, J. K.	Wills, G.
Sutcliffe, H.	Vosper, D. F.	Wilson, Geoffrey (Truro)
Taylor, William (Bradford, N.)	Wakefield, Edward (Derbyshire, W.)	Wood, Hon. R.
Teeling, W.	Wakefield, Sir Wavell (Marylebone)	York, C.
Thomas, Rt. Hon. J. P. L. (Hereford)	Walker-Smith, D. C.
Thomas, P. J. M. (Conway)	Ward, Hon. George (Worcester)	TELLERS FOR THE NOES:
Thompson, Kenneth (Walton)	Ward, Miss I. (Tynemouth)	Mr. Drewe and Mr. Studholme.
Thompson, Lt.-Cdr. R. (Croydon, W.)	Waterhouse, Capt. Rt. Hon. C.

Sir Wavell Wakefield (St. Marylebone)

I beg to move, in page 2, line 24, at the end, to add: (5) Any person being a cab owner to whom a cab licence has been granted by the Commissioner of Police of the Metropolis for a motor cab under the London Cab Order, 1934, and remains valid shall be entitled to an allowance or repayment of one shilling per gallon (hereinafter referred to as "the taxicab rebate") of the duty in respect of the hydrocarbon oil purchased by him for use in supplying motive power for such motor cab: Provided that an application for the taxicab rebate allowed by this subsection must be made to the Commissioners of Customs and Excise in such manner as the Commissioners may prescribe. This Amendment asks for a rebate of 1s. 0d. per gallon to the London taxicab service and the reason for it is that the service is now running at a loss. On 18th March I asked the Chancellor of the Exchequer if he was aware that by imposing an additional tax on petrol he was making it impossible for London taxi-cabs to operate without loss, and what action he was proposing to take to enable this service to continue operations. My right hon. Friend replied: The additional duty will mean, in the case of a vehicle doing 15 miles to the gallon, an extra cost of ½d. per mile. I regret that it was necessary to make this increase, but I have no evidence that it will involve discontinuance of the London taxi service."—[OFFICIAL REPORT, 18th March, 1952; Vol. 497, c. 190.] Since my right hon. Friend answered that question a memorandum has been sent him and full evidence, supported by statistics, has been given him which shows that the London taxi-cab service was losing a ½d. a mile before the Budget and an extra ½d. a mile since the Budget announcement of an increase in the petrol tax. That means that the loss per cab per annum amounts to about £200 per year.

It might be suggested that the loss in recent months will not occur in the summer months, but I should like to suggest that the peak period of some six weeks in June and July when a profit might be made will not offset a loss of 1d. per mile during the remainder of the year, a period of 46 weeks. The question therefore remains: Does the Chancellor want the taxi-cab service to exist in London? If he does not want it to exist then he has only to leave the tax as at present and the taxi-cab service in London will fade away. If he wants it to remain it is necessary for some assistance to be given.

The suggestion that I have made in this Amendment is a practical one. There is no fear of abuse. There is control through the police licences of the taxi-cab owners and drivers. The cab mileage is known and is recorded. The miles per gallon are known and the rebate could be claimed from the Revenue at the end of the year on an auditor's certificate of the mileage done and the gallons of petrol used.

11.30 p.m.

It might be suggested that there would be a cost to the Exchequer of some £500,000 or £600,000 a year; but, in point of fact, that would not be the case for that is assuming that the London taxi-cab service continues to run—which it will not, unless something is done. One has to take into account the fact that new cabs are no longer coming on to the London streets to replace the old ones which are due to be taken off under police regulations. Some 1,103 cabs are due this year to leave London streets, and no new vehicles are coming on. Eighty-nine new cabs were introduced in the early weeks of this year, but the service has declined from 7,684 in 1938 to 6,162 at the beginning of this year, and is now down to 5,948.

I give these figures to show that revenue will be lost to the Exchequer if the 1,000 new cabs, planned to replace the old vehicles, are not forthcoming; double Purchase Tax will be lost, and that amounts to some £500,000 at £472 a cab. So, it is quite wrong to say that £500,000 or more will be lost.

Then, there remains the question of whether cabs are necessary in London. I suggest that they are not only desirable, but are a necessity for conveying people with heavy baggage who cannot use the Tube or bus, and who do not have a private car. They are necessary for business requirements and for overseas visitors coming to London. It is unthinkable that London should be the only great capital city without such a service, and I therefore suggest that help should be given to the London cabs and discrimination made because they are public service vehicles, specially constructed to meet police requirements and in no way comparable with private hire vehicles which can charge what they like, and which are not subject to special construction regulations.

For these reasons, I submit that the London cab service is desirable, and necessary, and if it is to continue to operate, relief must be given; and by giving relief, there will not be a loss to the Treasury. The proposed method of granting relief would be simple. Upon the Chancellor's decision depends the life or death of the London taxi-cab service.

Mr. Boyd-Carpenter

It would perhaps be convenient if I intervened at this stage

to say that we appreciate that there is here a very real problem. I fully accept what my hon. Friend has said about the London cab service being of very great importance to a great capital city such as ours. But his specific proposal has its reaction upon the cab services of other cities, and it is necessary to give fuller consideration to the effects of that reaction. We are anxious to consider the whole of this problem and the best method of dealing with it.

We do, however, require a little time to give this problem the examination it deserves, and I hope that my hon. Friend will be prepared to allow us further time. I ask him to do that on the clear understanding that we realise that this is a real problem and the proper method of dealing with it needs to be considered. There is also the question of the hour, so far as this Committee is concerned. It is a little late. We have had a good example of the way the Parliamentary machine can work and it would be particularly appropriate if we could continue that to the end.

Sir W. Wakefield

In view of the statement of the Financial Secretary, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 237; Noes, 223.

Division No. 110.]	AYES	[11.35 p.m.
Allan, R. A. (Paddington, S.)	Buchan-Hepburn, Rt. Hon. P. G. T.	Dodds-Parker, A. D.
Alport, C. J. M.	Bullard, D. G.	Donaldson, Cmdr. C. E. McA.
Amery, Julian (Preston, N.)	Bullock, Capt. M.	Donner, P. W.
Amory, Heathcoat (Tiverton)	Bullus, Wing Commander E. E.	Douglas-Hamilton, Lord Malcolm
Anstruther-Gray, Major W. J.	Burden, F. F. A.	Drayson, G. B.
Arbuthnot, John	Butcher, H. W.	Drewe, C.
Ashton, H. (Chelmsford)	Butler, Rt. Hon. R. A. (Saffron Walden)	Duncan, Capt. J. A. L.
Assheton, Rt. Hon. R. (Blackburn, W.)	Carr, Robert (Mitcham)	Duthie, W. S.
Astor, Hon. J. J. (Plymouth, Sutton)	Carson, Hon. E.	Elliot, Rt. Hon. W. E.
Astor, Hon. W. W. (Bucke, Wycombe)	Cary, Sir Robert	Erroll, F. J.
Baldock, Lt.-Cmdr. J. M.	Channon, H.	Fell, A.
Baldwin, A. E.	Churchill, Rt. Hon. W. S.	Finlay, Graeme
Barber, A. P. L.	Clarke, Col. Ralph (East Grinstead)	Fisher, Nigel
Baxter, A. B.	Clarke, Brig. Terence (Portsmouth, W.)	Fleetwood-Hesketh, R. F.
Beach, Maj. Hicks	Cole, Norman	Fletcher-Cooke, C.
Bell, Philip (Bolton, E.)	Colegate, W. A.	Fort, R.
Bell, Ronald (Bucks, S.)	Conant, Maj. R. J. E.	Foster, John
Bennett, F. M. (Reading, N.)	Cooper, Sqn. Ldr. Albert	Fraser, Sir Ian (Morecambe & Lonsdale)
Bennett, Dr. Reginald (Gosport)	Cooper-Key, E. M.	Gage, C. H.
Bevins, J. R. (Toxteth)	Craddock, Berestord (Spelthorne)	Galbraith, Cmdr. T. D. (Pollok)
Birch, Nigel	Cranborne, Viscount	Gammans, L. D.
Bishop, F. P.	Crookshank, Capt. Rt. Hon. H. F. C.	Garner-Evans, E. H.
Black, C. W.	Crosthwaite-Eyre, Col. O. E.	Godber, J. B.
Boyd-Carpenter, J. A.	Crouch, R. F.	Gomme-Duncan, Col. A.
Boyle, Sir Edward	Crowder, Petre (Ruislip—Northwood)	Graham, Sir Fergus
Braine, B. R.	Darling, Sir William (Edinburgh, S.)	Gridley, Sir Arnold
Brooke, Henry (Hampstead)	Davidson, Viscountess	Grimston, Hon. John (St. Albans)
Brooman-White, R. C.	Deedes, W. F.	Grimston, Sir Robert (Westbury)
Browne, Jack (Govan)	Digby, S. Wingfield	Harden, J. R. E.
Hare, Hon. J. H.	MacLeod, Iain (Enfield, W.)	Ropner, Col. Sir Leonard
Harris, Frederic (Croydon, N.)	Macmillan, Rt. Hon. Harold (Bromley)	Russell, R. S.
Harris, Reader (Heston)	Macpherson, Maj. Niall (Dumfries)	Ryder, Capt. R. E. D.
Harrison, Col. J. H. (Eye)	Maitland, Comdr. J. F. W. (Horncastle)	Salter, Rt. Hon. Sir Arthur
Harvey, Air Cdre. A. V. (Macclesfield)	Maitland, Patrick (Lanark)	Schofield, Lt.-Col. W. (Rochdale)
Harvey, Ian (Harrow, E.)	Manningham-Buller, Sir R. E.	Scott, R. Donald
Hay, John	Markham, Major S. F.	Scott-Miller, Cmdr. R.
Head, Rt. Hon. A. H.	Marlowe, A. A. H.	Shepherd, William
Heald, Sir Lionel	Marples, A. E.	Simon, J. E. S. (Middlesbrough, W.)
Higgs, J. M. C.	Marshall, Douglas (Bodmin)	Smithers, Peter (Winchester)
Hill, Mrs. E. (Wythenshawe)	Marshall, Sidney (Sutton)	Smyth, Brig. J. G. (Norwood)
Hirst, Geoffrey	Maude, Angus	Soames, Capt. C.
Hollis, M. C.	Maydon, Lt.-Comdr. S. L. C.	Spearman, A. C. M.
Hopkinson, Henry	Medlicott, Brig. F.	Speir, R. M.
Hornsby-Smith, Miss M. P.	Mellor, Sir John	Spence, H. R. (Aberdeenshire, W.)
Horobin, I. M.	Molson, A. H. E.	Stanley, Capt. Hon. Richard
Howard, Gerald (Cambridgeshire)	Monckton, Rt. Hon. Sir Walter	Stevens, G. P.
Howard, Greville (St. Ives)	Morrison, John (Salisbury)	Stewart, Henderson (Fife, E.)
Hudson, Sir Austin (Lewisham, N.)	Mott-Radclyffe, C. E.	Stoddart-Scott, Col. M.
Hurd, A. R.	Nabarro, G. D. N.	Strauss, Henry (Norwich, S.)
Hutchinson, Sir Geoffrey (Ilford, N.)	Nicholls, Harmar	Stuart, Rt. Hon. James (Moray)
Hutchison, Lt.-Com. Clark (E'b'rgh W.)	Nicolson, Nigel (Bournemouth, E.)	Taylor, William (Bradford, N.)
Hutchison, James (Scotstoun)	Nield, Basil (Chaster)	Teeling, W.
Hyde, Lt.-Col. H. M.	Noble, Cmdr. A. H. P.	Thomas, Rt. Hon. J. P. L. (Hereford)
Hylton-Foster, H. B. H.	Nutting, Anthony	Thomas, P. J. M. (Conway)
Jenkins, R. C. D. (Dulwich)	Oakshott, H. D.	Thompson, Kenneth (Walton)
Johnson, Eric (Blackley)	Odey, G. W.	Thompson, Lt.-Cdr. R. (Croydon, W.)
Jones, A. (Hall Green)	O'Neill, Rt. Hon. Sir H. (Antrim, N.)	Thorneycroft, R. Hn. Peter (Monmouth)
Joynson-Hicks, Hon. L. W.	Orr, Capt. L. P. S.	Thornton-Kemsley, Col. C. N.
Kaberry, D.	Orr-Ewing, Charles Ian (Hendon, N.)	Tilney, John
Keeling, Sir Edward	Osborne, C.	Turner, H. F. L.
Kerr, H. W. (Cambridge)	Partridge, E.	Vane, W. M. F.
Lambert, Hon. G.	Perkins, W. R. D.	Vaughan-Morgan, J. K.
Lambton, Viscount	Peto, Brig. C. H. M.	Vesper, D. F.
Lancaster, Col. C. G.	Peyton, J. W. W.	Wakefield, Edward (Derbyshire, W.)
Leather, E. H. C.	Pilkington, Capt. R. A.	Wakefield, Sir Wavell (Marylebone)
Legge-Bourke, Maj. E. A. H.	Pitman, I. J.	Walker-Smith, D. C.
Legh, P. R. (Petersfield)	Powell, J. Enoch	Ward, Hon. George (Worcester)
Lindsay, Martin	Price, Henry (Lewisham, W.)	Ward, Miss I. (Tynemouth)
Linstead, H. N.	Profumo, J. D.	Waterhouse, Capt. Rt. Hon. C.
Lloyd, Maj. Guy (Renfrew, E.)	Raikes, H. V.	Webbe, Sir H. (London & Westminster)
Lloyd, Rt. Hon. Selwyn (Wirral)	Rayner, Brig. R.	Wellwood, W.
Lockwood, Lt.-Col. J. C.	Redmayne, M.	White, Baker (Canterbury)
Longden, Gilbert (Herts, S.W.)	Remnant, Hon. P.	Williams, Gerald (Tonbridge)
Lucas, Sir Jocelyn (Portsmouth, S.)	Renton, D. L. M.	Williams, Sir Herbert (Croydon, E.)
Lucas, P. B. (Brantford)	Roberts, Peter (Heeley)	Wills, G.
Lucas-Tooth, Sir Hugh	Robertson, Sir David	Wilson, Geoffrey (Truro)
Macdonald, Sir Peter (I. of Wight)	Robinson, Roland (Blackpool, S.)	Wood, Hon. R.
Mackeson, Brig. H. R.	Robson-Brown, W.
McKibbin, A. J.	Rodgers, John (Sevenoaks)	TELLERS FOR THE AYES:
McKie, J. H. (Galloway)	Roper, Sir Harold	Mr. Studholme and Mr. Edward Hoar.
NOES
Acland, Sir Richard	Chetwynd, G. R.	Finch, H. J.
Adams, Richard	Clunie, J.	Fletcher, Eric (Islington, E.)
Allen, Arthur (Bosworth)	Cocks, F. S.	Follick, M.
Awbery, S. S.	Coldrick, W.	Foot, M. M.
Bacon, Miss Alice	Collick, P. H.	Forman, J. C.
Baird, J.	Cook, T. F.	Fraser, Thomas (Hamilton)
Balfour, A.	Corbet, Mrs. Freda	Freeman, John (Watford)
Bellenger, Rt. Hon. F. J.	Craddock, George (Bradford, S.)	Freeman, Peter (Newport)
Bence, C. R.	Crosland, C. A. R.	Gaitskell, Rt. Hon. H. T. N.
Benn, Wedgwood	Cullen, Mrs. A.	Gibson, C. W.
Benson, G.	Dalton, Rt. Hon. H.	Glanville, James
Beswick, F.	Darling, George (Hillsborough)	Gordon-Walker, Rt. Hon. P. C.
Bevan, Rt. Hon. A. (Ebbw Vale)	Davies, A. Edward (Stoke, N.)	Greenwood, Anthony (Rossendale)
Bing, G. H. C.	Davies, Ernest (Enfield, E.)	Greenwood, Rt. Hon. Arthur (Wakefield)
Blackburn, F.	Davies, Harold (Leek)	Grey, C. F.
Blyton, W. R.	Deer, G.	Griffiths, David (Rother Valley)
Boardman, H.	Delargy, H. J.	Griffiths, Rt. Hon. James (Llanelly)
Bottomley, Rt. Hon. A. G.	Dodds, N. N.	Griffiths, William (Exchange)
Bowden, H. W.	Donnelly, D. L.	Grimond, J.
Bowen, E. R.	Driberg, T. E. N.	Hale, Leslie (Oldham, W.)
Braddock, Mrs. Elizabeth	Dugdale, Rt. Hon. John (W. Bromwich)	Hall, Rt. Hon. Glenvil (Colne Valley)
Brockway, A. F.	Ede, Rt. Hon. J. C.	Hall, John (Gateshead, W.)
Brook, Dryden (Halifax)	Edelman, M.	Hamilton, W. W.
Burke, W. A.	Edwards, John (Brighouse)	Hannan, W.
Burton, Miss F. E.	Edwards, W. J. (Stepney)	Hargreaves, A.
Butler, Herbert (Hackney, S.)	Evans, Albert (Islington, S.W.)	Hayman, F. H.
Callaghan, L. J.	Evans, Stanley (Wednesbury)	Healey, Denis (Leeds, S.E.)
Carmichael, J.	Ewart, R.	Henderson, Rt. Hon. A. (Rowley Regis)
Castle, Mrs. B. A.	Fernyhough, E.	Hewitson, Capt. M.
Champion, A. J.	Field, W. J.	Hobson, C. R.
Chapman, W. D.	Fienburgh, W.	Holman, P.

Holt, A. F.	Morgan, Dr. H. B. W.	Soskice, Rt. Hon. Sir Frank
Houghton, Douglas	Morley, R.	Sparks, J. A.
Hoy, J. H.	Morris, Percy (Swansea, W.)	Steele, T.
Hudson, James (Ealing, N.)	Morrison, Rt. Hon. H. (Lewisham, S.)	Stewart, Michael (Fulham, E.)
Hughes, Cledwyn (Anglesey)	Mulley, F. W.	Stokes, Rt. Hon. R. R.
Hughes, Hector (Aberdeen, N.)	Murray, J. D.	Strachey, Rt. Hon. J.
Hynd, H. (Accrington)	Neal, Harold (Bolsover)	Strauss, Rt. Hon. George (Vauxhall)
Hynd, J. B. (Attercliffe)	Noel-Baker, Rt. Host. P. J.	Summerskill, Rt. Hon. E.
Irvine, A. J. (Edge Hill)	O'Brien, T.	Sylvester, G. O.
Irving, W. J. (Wood Green)	Oliver, G. H.	Taylor, Bernard (Mansfield)
Janner, B.	Orbach, M.	Taylor, John (West Lothian)
Jay, Rt. Hon. D. P. T.	Oswald, T.	Taylor, Rt. Hon. Robert (Morpeth)
Jager, George (Goole)	Padley, W. E.	Thomas, David (Aberdare)
Jenkins, R. H. (Stechford)	Paling, Rt. Hon. W. (Dearne Valley)	Thomas, George (Cardiff)
Johnson, James (Rugby)	Paling, Will T. (Dewsbury)	Thomas, Iorwerth (Rhondda, W.)
Johnston, Douglas (Paisley)	Pannell, Charles	Thomas, Ivor Owen (Wrekin)
Jones, David (Hartlepool)	Pargiter, G. A.	Turner-Samuels, M.
Jones, Frederick Elwyn (West Ham, S.)	Parker, J.	Ungoed-Thomas, Sir Lynn
Jones, Jack (Rotherham)	Peart, T. F.	Usborne, H. C.
Jones, T. W. (Merioneth)	Plummer, Sir Leslie	Wallace, H. W.
Keenan, W.	Porter, G.	Watkins, T. E.
Key, Rt. Hon. C. W.	Price, Joseph T. (Westhoughton)	Weitzman, D.
King, Dr. H. M.	Price, Philips (Gloucestershire, W.)	Wells, William (Walsall)
Lee, Miss Jennie (Cannock)	Proctor, W. T.	West, D. G.
Lever, Leslie (Ardwick)	Pryde, D. J.	White, Mrs. Eirene (E. Flint)
Lewis, Arthur	Pursey, Cmdr. H.	White, Henry (Derbyshire, N.E.)
Lindgren, G. S.	Reeves, J.	Whiteley, Rt. Hon. W.
McGhee, H. G.	Reid, Thomas (Swindon)	Wigg, George
McInnes, J.	Rhodes, H.	Wilkins, W. A.
McKay, John (Wallsend)	Robens, Rt. Hon. A.	Willey, Octavius (Cleveland)
McLeavy, F.	Roberts, Albert (Normanton)	Williams, David (Neath)
McNeil, Rt. Hon. H.	Roberts, Goronwy (Caernarvonshire)	Williams, Rev. Llywelyn (Abertillery)
MacPherson, Malcolm (Stirling)	Rogers, George (Kensington, N.)	Williams, Ronald (Wigan)
Mainwaring, W. H.	Ross, William	Williams, W. R. (Droylsden)
Mallalieu, E. L. (Brigg)	Royle, C.	Williams, W. T. (Hammersmith, S.)
Manuel, A. C.	Schofield, S. (Barnsley)	Wilson, Rt. Hon. Harold (Huyton)
Marquand, Rt. Hon. H. A.	Shackleton, E. A. A.	Winterbottom, Ian (Nottingham, C.)
Mayhew, C. P.	Shawcross, Rt. Hon. Sir Hartley	Winterbottom, Richard (Brightside)
Mellish, R. J.	Shinwell, Rt. Hon. E.	Woodburn, Rt. Hon. A.
Messer, F.	Short, E. W.	Wyatt, W. L.
Mikardo, Ian	Silverman, Julius (Erdington)	Yates, V. F.
Mitchison, G. R.	Simmons, C. J. (Brierley Hill)	Younger, Rt. Hon. K.
Monslow, W.	Slater, J.
Moody, A. S.	Sorenson, R. W.	TELLERS FOR THE NOES:
		Mr. Pearson and Mr. Horace Holmes.

Resolution agreed to.

To report Progress, and ask leave to sit again.—[Mr. R. A. Butler.]

Committee report Progress; to sit again Tomorrow.