Clause 6.—(VEHICLES (EXCISE).) (Hansard, 8 May 1952)

§ The Chairman
Mr. Eric Fletcher.

§ Lieut.-Colonel Marcus Lipton (Brixton)
On a point of order, Sir Charles. I was in the course of concluding my remarks on this Amendment when Progress was reported, and I should like permission to finish.

§ The Chairman
This is a new Committee and anybody can be called as often as they catch my eye. I have no doubt that the hon. Member for Islington, East (Mr. E. Fletcher) will not mind if his hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) proceeds with his original speech.

§ Lieut.-Colonel Lipton
I understand that my hon. Friend does not object to my concluding my remarks on the Amendment and I am much obliged to him. I will round off the argument that I was earlier seeking to deploy.
I should first like to express satisfaction that the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) is still Financial Secretary to the Treasury. When I read this morning's newspapers, I had a fear that some other hon. Member might be filling that rôle, in which case it would have been necessary for me to recapitulate in extensowhat I had said on the previous occasion. Fortunately, that is not now necessary. I understand that the Financial Secretary even has a copy of what I then said before him.
572 I said that, as a result of the Clause which we are seeking to amend, the Government are imposing a penalty upon about 700,000 owners of cars of under 10 h.p. which were first registered before 1st January, 1947. That figure was not challenged at the time and I assume it to be approximately correct. The 700,000 car owners are being unfairly exploited and penalised. They will have to pay more tax in order to subsidise the relief given to owners of pre-1947 cars of 15, 20, 25 or 30 horse power. The tax for owners in those categories will come down from as much as £30 to £12 10s. and they will thus obtain a substantial saving.
It might be argued by the Financial Secretary on grounds of administrative convenience that it is much more economical of effort in the various tax offices to have one flat rate applicable to all cars. I am willing to concede that argument, but there is a limit beyond which administrative convenience should not be pushed, because the result of going beyond that limit will be to inflict hardship and injustice on this small but deserving class of motor car users.
I hope that during the discussion the Financial Secretary will indicate what would be the exact cost of the concession we ask him to make. Figures which have previously appeared are somewhat puzzling. When some of us were advocating a £10 flat rate for cars as long ago as 1947. we were told that the cost of applying it to the benefit of the pre-1947 cars would be £5,500,000. In 1949, for some unexplained reason, that figure had gone up to £5,750,000. In 1950, when the matter was again raised, we were told that the cost would be about £6 million.
I find it difficult to understand why the figure is rising, except on the assumption that a lot of pre-1947 cars are rising from the grave and are now once more to be found touring up and down the highways and byways of the country. Is it a fact that more of the old cars are coming on the roads? That is the only explanation I can find to account for the increased sum which the concession would apparently cost.
The cost of the concession would be small, especially if taken in relation to the total Road Tax yield of £300 million. Knowing how well the Financial Secretary has argued this matter on previous 573 occasions, I am convinced that he will want to do justice to the users of small pre-1947 cars. I cannot believe that he will argue that it is necessary to take from the poorer car owner in order to subsidise the richer car owner.
I hope the Financial Secretary will take advantage of his unique opportunity of being the first Minister on the Front Bench not to execute a somersault on something he has said on a previous occasion. If the hon. Gentleman stands by what he has said on this subject on previous occasions, he can have the unique honour and distinction of being the first Minister who, on reaching office, stands by what he said when he was in Opposition.

§ Mr. Eric Fletcher (Islington, East)
I cannot help feeling that, when making these new proposals for taxing motor cars, the Chancellor of the Exchequer overlooked the glaring injustice which it is the object of the Amendment to remedy, and I cannot help feeling that the Financial Secretary will wish to remedy the injustice.
The basic proposal of the Budget to have a flat rate of £12 10s. per vehicle for all motor cars whether first taxed before 1947 or afterwards was sound in principle, but it has, as I am sure the Government have now recognised, produced a quite inequitable and unjust effect upon the owners of cars of less than 10 h.p. which were first taxed before 1947.
The result of the Chancellor's proposals is to give a very considerable benefit to the owners of all the large cars of priorto-1947 vintage, such as the Rolls Royces, the Daimlers, the Bentleys and all the expensive fashionable cars. All those car owners will derive great benefit; in future they will have to pay a tax of only £12 10s. compared with the very much higher rate of tax which they have paid hitherto.
I have no objection to the Chancellor giving concessions of that kind to the owners of large and expensive cars. If the Tory Party think that it is a good thing to give away revenue in that manner, I have no quarrel about it, and there is no Amendment on the Order Paper in my name or the names of my hon. Friends to prevent them doing that, but we do object to this typical illustration of the neglect of the interests of the 574 small men. It is typical of the Tory Party that it seems to be quite oblivious to the hardships which are caused to a small deserving class of car owners. Why should a man who has an old car, perhaps a 7 or 8 h.p. car going back to 1938 or 1939, and who for years has only been paying £10 in tax, have to pay £12 10s. a year?
4.30 p.m.
There is no question of administrative convenience or simplicity in this. I have no objection to administrative simplicity or to neat and tidy arrangements, but in my view they are carried too far if they are introduced at the expense of small, deserving people who are trying to keep a car and who have budgeted for years on the basis that they would only have to pay a £10 tax. Why should they suddenly have to pay a tax of £12 10s.? There is no rhyme or reason to justify this kind of punitive, irrational and illogical taxation.
Something was said by my right hon. Friend about the increase in the price of petrol. I thought the Chancellor added insult to injury when he said that perhaps these people would have to use less petrol. But they are entitled to use petrol in the same way as anybody else, and if they do not use so much it is because they cannot buy so much. This may appear to be a small matter to some hon. Members on both side of the Committee, but I think it is a matter of principle.
As I have said, this is an indication of the reckless disregard by the Tory Government of the rights and interests of the small man, and I hope that without any further debate we shall hear from the Government that they are prepared to repair the injustice contained in the Clause as it stands and to accept this Amendment.

§ The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter)
First of all, may I express my appreciation to the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) for his very kindly references to a speech made by me in this Chamber two years ago? I am bound to say that my subsequent consultation of that speech has not caused me to dissent from his views on its merit. It has, however, disclosed the fact that whatever it may have been as a work of art it was not effective in persuading the hon. and gallant Gentleman 575 to come into the Lobby with me, since his assent to the proposition which I then put forward was confined to verbal action and his physical action took him to the other Lobby. However, I am grateful for his courteous comments.
This Amendment is intended to prevent any increase in the taxation on any pre-1947 car. It would leave the position that £12 10s. would be the maximum rate applicable to any pre-1947 car and the flat rate for any post-1947 car. I think that fairly states what would be the effect, and is, I am sure, the intention of the Amendment moved by the right hon. Gentleman the night before last. There is one immediate objection to it of a kind which I am sure is not unfamiliar to the right hon. Gentleman the Member for Battersea, North (Mr. Jay), and that is that it would cost a substantial amount of revenue. The hon. Member for Islington, East (Mr. E. Fletcher), asked how much. The figure is £1,400,000.

§ Mr. Glenvil Hall (Colne Valley)
That is nothing.

§ Mr. Boyd-Carpenter
The right hon. Gentleman says it is nothing, but when, during the last few years, I attempted to extract from the right hon. Gentleman very much smaller concessions than this, he certainly did not regard £1,400,000 as nothing. It is obviously a factor which this Committee and any Chancellor of the Exchequer has to take into account, and to take perhaps the more seriously into account when it is appreciated that the Clause as a whole with its introduction of a flat rate for motor car taxation—a proposition which in general and in principle has been urged for a good many years as the hon. and gallant Member for Brixton reminded me-involves some loss to the Revenue.
The cost is £880,000 this year and £1,300,000 in a full year. Therefore, if we add to that the £1,400,000 which this Amendment would involve the cost of introducing a flat rate scheme of motor taxation would be put up to the substantial total figure of £2,700,000. That, obviously, is a very serious factor as I am sure all hon. Members, whatever their views on this particular Amendment, will in principle agree.
576 There is also, of course, the practical point which I think the hon. Member for Islington, East, admitted had some validity, though he did not think very much, that, administratively, a general flat rate is easier and therefore more economical in staff and administration. That, again, is a factor to which I am sure the Committee will wish to give due weight when considering what it thinks about this Amendment.
The right hon. Member for Battersea, North, and the hon. Member for Islington, East, this afternoon, put some emphasis on the position under this Clause as it stands of the small car owner. They both emphasised that in the case of the smallest cars there was a substantial proportionate increase in the rate of duty. To get the matter into proportion let us see how it works out. The 10 h.p. car owner remains unaffected by the change and continues to pay £12 10s. Therefore, the only people adversely affected are the owners of cars of 9 h.p. and less. The 9 h.p. car is, at the moment, taxed at £11 5s. and, therefore, there is an increase of 25s., which is actually less, of course, than the increase that falls on the owner of the post-1947 car whose rate of tax rises from £10 to £12 10s.
The 8 h.p. car of pre-1947 vintage comes into exactly the same position as the post-1947 car of any horse-power. The tax goes from £10 to £12 10s., though one can appreciate that even that sum is a serious matter for some people. Those people with the pre-1947 8 h.p. car are being treated in the same way as the generality of post-1947 car owners. It is only when we get below the 8 h.p. car, to the 7 and the 6 h.p. car, that the increase becomes proportionately fairly substantial.
The tax on the 7 h.p. car would, under the Clause as it stands, go up from £8 15s. to £12 10s. The number of these vehicles is not at the moment very large. So far as I know it is under 10,000. Then, of course, the heaviest increase quite obviously falls on the 6 h.p. car. Again, there are very few of these—under 100—registered at the moment, but the increase in tax is, of course, proportionately fairly severe—from £7 10s. to £12 10s.
It appears from that analysis that a disproportionately heavy increase falls on 577 the comparatively limited number of vehicles in the pre-1947 6 and 7 h.p. classes. In view of that, my right hon. Friend has been giving consideration to the special case of those owners of 6 and 7 h.p. cars which, as I have said, would under the Clause as it stands find themselves having their rate of duty as a matter of percentage very heavily increased.
He has come to the conclusion that it would be right on the Report stage to recommend to the House, as it will then be, that in the case of the 6 h.p. and 7 h.p. cars the amount of increase should not be allowed to exceed 25 per cent. That is precisely the percentage of increase which falls on all post-1947 cars and falls equally, of course, on the pre-1947 car of 8 h.p.
My right hon. Friend considers that that concession would deal with the really hard cases. I am not saying that those not covered by that concession may not feel the burden in some cases and, of course, one of the difficulties of this matter is that it is very difficult in practice to be sure whether small cars are owned by wealthy or less wealthy people. There are hon. Members of this Committee who own cars, which can be seen in Palace Yard, of quite inconspicuous dimensions, and I believe that one of the 6 h.p. cars belongs to an hon. Member.
But, on the whole, it is reasonable to say that the small horse-power car, by which is generally meant the pre-1947 Austin Seven type, is probably on balance owned by people less well off than the average of car owners, though I think the Committee will agree with me that it is awfully difficult to draw any firm distinction.
At any rate, the steps my right hon. Friend will take on the Report stage of the Bill will mitigate hardship for that type of car owner. Owing to the very limited number of cars involved the cost of this concession is something in the neighbourhood of £15,000. That emphasises the fact that these hard cases are very limited in number. For the rest, the overwhelming majority of hon. Members have desired over the last few years that we should introduce a flat-rate for motor taxation.
Indeed, the speech of mine to which the hon. and gallant Member for Brixton 578 was good enough to refer was directed to that theme, as was his own on that occasion and those of other hon. Members on both sides of the Committee. It would not be possible to do that without a loss over the year of £7 million. Therefore, I would recommend to the Committee the proposals contained in this Clause as offering the solution forecast as long ago as 1947 by the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton), of an overall flat-rate but tempering the wind to the shorn automobile in the way in which I have suggested the Chancellor will do on the Report stage.

§ Mr. Douglas Jay (Battersea, North)
Perhaps I should say straight away that although the hon. Gentleman has not gone nearly as far as we suggested to meet this injustice, he has, nevertheless, directed his mind to the most severely hit category of cases. I did not quite follow the figures. The hon. Gentleman told us that the whole concession we suggested would cost £1,400,000. He told us that the proportionate increase in taxation is far more severe in the case of the 6 h.p. and 7 h.p. cars, which I agree is the case, but, finally, he informed us that to give a proportion of the concession we ask for, in those cases only, costs £15,000 which seems to me a rather extraordinary discrepancy. I suppose the answer is that there is a greater number of cars of more than 6 h.p. and 7 h.p. involved.

§ Mr. Boyd-Carpenter
I thought I made it clear that the 6 h.p. category is negligible in numbers—under 100—while there are under 10,000 of the cars of 7 h.p.

§ Mr. Jay
We argued this as a case for equity to the small man and I think the hon. Gentleman has regarded it in that spirit and has gone a fair way to meet us. Therefore, I shall not ask my hon. Friends to pursue the matter further and press the Amendment to a Division though we shall look with interest at the proposals in detail on the Report stage.
The hon. Gentleman said he will limit the increase in taxation to 25 per cent. Does he mean the duty will be merely increased by that amount in the present financial year and he looks forward to its going up perhaps by the whole amount in subsequent years, or is it the Chancellor's intention that it should go up by 579 this amount now and remain there in the future in the case of small cars?

§ Mr. Boyd-Carpenter
It is impossible to bind my right hon. Friend in subsequent Finance Bills or any of his ultimate successors. We have no present intention of providing this concession other than on a permanent basis. The right hon. Gentleman will appreciate that this category of cars will gradually die out, if that is the appropriate expression.

§ Mr. Jay
I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.

§ Lieut.-Colonel Lipton
I beg to move, in. page 7, line 43, to leave out "twelve pounds ten shillings," and to insert "ten pounds."
The effect of this Amendment would be to reduce the flat-rate for taxation from £12 10s. to £10. I move the Amendment mainly for exploratory purposes. It was necessary, in accordance with your Ruling, Sir Charles, to move the Amendment separately from the one we have just been discussing. But in the course of our discussion of that Amendment the Financial Secretary has given to some extent the information I was seeking to obtain.
It is quite true that this £12 10s. flat-rate hits the small man hard. We have tried to secure for him some measure of fair play and he has received a little consideration from the Financial Secretary in the statement the hon. Gentleman has just made. The hon. Gentleman will remember that before the war motoring organisations consistently urged the revision of the taxation system by abolishing the horse-power Duty altogether and substituting a small annual registration fee which would be supplemented by revenue coming from the fuel Duty itself. This "pay-as-you-go" method would have been more equitable in that it would have related the tax paid to the actual use made of the vehicle.
The total fuel taxation this year will realise £65 million and the total from Road Fund taxation will be over £300 million. In view of those enormous sums it is not unreasonable to press that the rate should have remained at £10. The comparatively small amount involved 580 in the adoption of the £10 flat-rate Duty for all cars of 8 h.p. and above would not represent a very great drain on the Exchequer in the light of the large amount the Government are now seeking to obtain from car users.

§ Mr. Boyd-Carpenter
As the hon. and gallant Gentleman has very properly said, a good deal of the ground on this Amendment was traversed by his hon. Friends and himself on the previous one. This, of course, is a proposal that goes a good deal further than did the previous Amendment. It means having the flat-rate system on the old basis of £10. As I told the Committee in the debate on the previous Amendment, if this Amendment were inserted in the Bill it would cost the Revenue the substantial sum of £7 million. Therefore, in the present state of our national economy it is not possible for my right hon. Friend to accept it.
Perhaps I might add that it must puzzle hon. Members, as it puzzles me, to find that the cost of this proposal has steadily risen since it was put forward some years ago. I am speaking from memory, but I think the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall), when he was Financial Secretary to the Treasury, gave a figure of something like £51 million, the right hon. Gentleman the Member for Battersea, North (Mr. Jay), gave a figure of £6 million; and I am now putting it at £7 million.
I believe the explanation is that we all underestimated the amount of bringing out on to the road old vehicles which would result from the de-rationing of petrol. The sum now totals £7 million, and for reasons which I do not think I ought to inflict on the Committee, having already imposed them on hon. Members on a previous Amendment, it is impossible for my right hon. Friend to accept this Amendment.

§ Mr. Roy Jenkins (Birmingham, Stechford)
The loss of revenue involved in accepting this Amendment is quite substantial, and that is the argument which has been put forward by the Financial Secretary to the Treasury and by the Chancellor of the Exchequer. The only person who would not agree with that would be the right hon. Gentleman the Minister of State for Economic Affairs. I am sorry that he is not here this after- 581 noon. He has not been here during the debates on this Bill as much as we would like and we quite understand the reasons for that. None the less, we greatly regret it.
I am sorry he is not here because I should like to have heard his views on this particular point. Last year he put to the Committee an extremely interesting argument. He was then dealing with an Amendment moved by his hon. Friend the Member for Chichester (Mr. JoynsonHicks), now the Parliamentary Secretary to the Ministry of Fuel and Power. It would have cost the Government £6 million and my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) resisted it on the ground of a loss of Revenue. But the Minister of State would not have it. He got up and said that the loss of revenue was, in his view, totally unimportant and suggested that why the then Opposition wanted the concession was to counter inflation, because, through the remission of tax, old cars would be brought on to the road and the resources available to the nation would be greater than the loss of £6 million which would be involved.
He therefore rejected completely the view that it was legitimate for a Chancellor of the Exchequer to resist a concession such as proposed by my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) on the ground that the revenue was important. Before we leave this Amendment we ought to have the views of the Financial Secretary on that extremely interesting argument put forward last year by his right hon. Friend and, if so. whether he accepts it or rejects it.

§ Mr. Boyd-Carpenter
I read, as I always do, with advantage what my right hon. Friend has said. He said it in somewhat different circumstances and I would point out that we are now concerned with the Finance Bill of 1952. I would urge on the Committee that in the circumstances of 1952 the loss of revenue involved in the proposed Amendment makes it impossible for my right hon. Friend the Chancellor of the Exchequer to accept this Amendment.

§ Mr. Douglas Houghton (Sowerby)
We are hearing constantly from the Chancellor of the Exchequer and from the 582 Financial Secretary that the cost of making a concession would mean a large loss to the Revenue. The Financial Secretary is using that argument frequently in answer to requests for concessions from this side of the Committee. We should remember, however, that when the Chancellor of the Exchequer is considering his Budget as a whole and looking at his proposals comprehensively, it probably does not escape him that certain anomalies will be revealed when the proposals come to be examined in detail on the several Clauses of the Bill. It will be strange if the Chancellor has left himself no room for manoeuvre. Surely any prudent Chancellor of the Exchequer must take account of the weakness of his detailed proposals which will be revealed under close examination of this Committee.
While being grateful for the concession which the hon. Gentleman recently announced, I would draw attention to the fact that it would cost only £13,000 or £14,000. The number of cars which would benefit from this relief would mean, in all, less than 10,000. That is a minute concession to make. If £14,000 is the limit of the room for manoeuvre that the right hon. Gentleman has left himself, we shall have arid and profitless discussions on this Bill, and I hope the hon. Gentleman is not pleading the poverty of his right hon. Friend's capacity in answer to requests for concessions.

§ Mr. Jay
Could the Financial Secretary tell us in what relevant respect circumstances are different this year from what they were when the Minister of State produced the argument which we have heard from my hon. Friend the Member for Stechford (Mr. Roy Jenkins)?

§ Mr. Boyd-Carpenter
If I were to rise to that fly which the right hon. Gentleman has thrown at me, we might be led into a discussion on the whole economic developments of the last 12 months, which, however agreeable to the right hon. Gentleman and myself, would not be agreeable to the Committee and would almost certainly be out of order.

§ The Chairman
Does the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) wish to withdraw his Amendment?

§ Lieut.-Colonel Lipton
No, Sir Charles.

§ Mr. Roy Jenkins
As the Minister of State for Economic Affairs has entered the Chamber, although he is not actually in his place, perhaps he would tell us how the circumstances have changed since he made his pronouncement. I am sorry that the Minister was not able to come along and listen to this point, because it is the point on which he pronounced so directly last year. I feel it would be an act of courtesy to the Committee as a whole if the right hon. Gentleman would tell us how he reconciles his statement last year with the completely different attitude which the Financial Secretary has taken up today.

§ Lieut.-Colonel Lipton
One of the reasons why I was unwilling to comply with your suggestion that I should withdraw the Amendment, Sir Charles, was that I saw the Minister of State for Economic Affairs coming into the Chamber and I thought he was going to take part in our debate and make his contribution. Now that he has resumed his place on the Treasury Bench perhaps he might choose to avail himself of the opportunity of explaining his position or of giving some further explanation of the point he put forward and to which attention has been drawn by my hon. Friend the Member for Stechford (Mr. Roy Jenkins).

§ Mr. Jenkins
For the guidance of the right hon. Gentleman, whom we are glad to have with us although we have waited quite a long time for him, perhaps I might put the exact point which I put to the Financial Secretary when he was resisting this Amendment.

§ The Chairman
I am well acquainted with the point and repetition of it would be very tedious to me.

§ Mr. Glenvil Hall
I agree wholeheartedly with what you are saying, Sir Charles. Tedious repetition is out of order. We accept that but I would remind you that the Minister of State for Economic Affairs was not here when my hon. Friend the Member for Stechford (Mr. Roy Jenkins) put his point, involving £6 million. Might I suggest that as the Minister has now been good enough to take his place on the Treasury Bench and my hon. Friend has a point which he desires to put to him, even if it involves a slight repetition it should be put to him so that the Committee 584 might have the advantage of hearing what the Minister has to say on this matter. No doubt his comments would be of interest to Members in every quarter of the Committee.

§ The Chairman
The hon. Gentleman the Member for Stechford (Mr. Roy Jenkins) put a point to me. I quite understood the reply of the Financial Secretary.

§ Mr. Glenvil Hall
The Minister of State for Economic Affairs is now in his place. He reached his place with such speed that it occurred to me that he was only too anxious to answer the point. It would be unfair to him—and unfair to my hon. Friend who has been making researches in the Library and also to all those who want to have a reply—not to let the Minister of State for Economic Affairs make such reply as he is obviously anxious to make if I read the signs aright.

§ The Chairman
I am not empowered to require anyone to speak. I cannot ask the right hon. Gentleman to stand up and catch my eye.

§ Mr. Jenkins
I think I can put my point to the Minister very shortly. Last year, when an Amendment was moved which would have cost the Exchequer £6 million, the right hon. Gentleman the present Minister of State for Economic Affairs put forward a very persuasive argument, saying that this loss would not be inflationary because of the counterinflationary effect of bringing on to the road a great number of old cars which had been laid up because of rationing. He said that that fact would counterbalance the loss of revenue.

§ The Chairman
That point was raised before.

§ The Minister of State for Economic Affairs (Sir Arthur Salter)
I am sorry I was not here for the discussion of this Amendment, but I recollect clearly the main tenor of my argument last summer. It was then addressed simply to the abolition of the great distinction between the tax upon post-1947 and pre-1947 cars. In that main respect what we are doing now exactly meets the argument which I put before the Committee last year. Anything else which I said at that time was purely subsidiary and 585 subordinate to that main point, on which there is nothing inconsistent with what I argued then and what is now being done.

§ Mr. Jenkins
I think the right hon. Gentleman's recollection of his speech last year is somewhat imperfect, because he opened his speech with the remark that a number of his hon. Friends had argued with great force the unfairness to those who owned pre-war cars. He opened his speech by saying that he was not concerned about that. He said: I am not going to say a word about the hardships or the anomalies or the effect upon the individual who happens to own an old car."—[OFFICIAL REPORT, 14th June, 1951; Vol. 488, c. 2638.] He then said that he wished to apply a purely economic argument, saying that the fact that more cars would be brought on to the road would have a counterinflationary effect.

§ Sir A. Salter
I was dealing with an economic point and not with regard to hardship to individuals. My argument was that there would be considerable advantages and few disadvantages arising from the abolition of the great distinction that was made at that time between taxation of post-1947 and pre-1947 cars. That was the point of my argument and that point has been met in our present proposals.

§ Mr. Jay
I should like to point out that in the absence of the Minister of State for Economic Affairs the Financial Secretary told us that the explanation of the discrepancy between the Government's action this year and the Minister's speech last year was that the financial circumstances of the moment were quite different; but a few minutes afterwards the Minister came into the Chamber and gave us a totally different explanation of the discrepancy. It was not quite so easy to follow, but it was certainly quite different.
Is not that perhaps a further example of the confusion which we all associate with this Government? Now that the Chancellor himself is here I should like to ask him if he will come to the Despatch Box and tell us which of those is the true explanation, or whether there is perhaps a third explanation.
Amendment negatived.

§ Mr. G. P. Stevens (Portsmouth, Lang, stone)
I beg to move, in page 7, line 47. at end, to insert: (2) From the beginning of the year nineteen hundred and fifty-three a vehicle which is constructed or adapted for use for the conveyance of goods or burden, but is not used for the conveyance thereof for hire or reward or for or in connection with a trade or business (including the performance by a local or public authority of its functions)

(a) if its unladen weight exceeds twelve hundredweight shall not be treated for the purposes of the Vehicles (Excise) Act, 1949, as a goods vehicle; and

(b) if its unladen weight does not exceed twelve hundredweight, shall not be chargeable with any duty under subsection (2) of section five of that Act in respect of any use thereof for drawing a trailer;

and section twenty-six of that Act shall apply for the purpose of determining the unladen weight of any vehicle for the purposes of this subsection as it applies for the purpose of determining the unladen weight of a goods vehicle for the purposes of section five of that Act. Clause 6 (1) provides that private cars shall pay an annual duty at the rate of £12 10s. a year. I listened with great interest last Tuesday, and again this afternoon, to the appeals from the heart, of the right hon. Gentleman the Member for Battersea, North (Mr. Jay) and his hon. Friends, who asked for the remedying of an anomaly or, as they see it, an unfairness, to small car owners. I confess that I have been impressed and convinced by the arguments against those which have been adduced by the Financial Secretary to the Treasury and the Minister of State for Economic Affairs.
I welcome this principle of the flat-rate tax; but I have detected an anomaly which will inflict a heavy financial penalty on a small but by no means insignificant number of people. The Vehicles (Excise) Act, 1949, defines a goods vehicle as: … a mechanically propelled vehicle … constructed or adapted for use and used for the conveyance of goods or burden of any description, whether in the course of trade or otherwise. I should like to direct the attention of the Committee to the words contained in my Amendment, which are: … a vehicle which is constructed or adapted for use for the conveyance of goods or burden, but is not used for the conveyance thereof for hire or reward or for or in connection with a trade or business. … Under the 1949 Act a utility vehicle, such as an estate car, a station wagon, or 587 something of that sort, is classed as a goods vehicle even though it may not be used for hire or reward or in connection with a trade or otherwise.
Consequently but for my Amendment, many people who are using station wagons for private purposes will find that from the 1st January, 1953, their vehicles are classed as goods vehicles and not as private vehicles, and they will have to pay £15 or £17 10s. a year—depending on the weight—together with an extra £10 a year should they tow a trailer. Many people who live in the country use an estate car for going into market once a week to buy rationed or other foods for their poultry, or for bringing in hay for their horses and, at the weekends, for taking their children to the cinema.
These cars are used purely as private cars and not in any shape or form for hire or reward or for trade or business; yet they may have to pay £27 10s. a year—or 220 per cent, of the new rate for private cars—from 1st January 1953. I feel that that is grossly inequitable, particularly in these days, when the owners of those cars have virtually no opportunity of changing their estate cars, which are heavily penalised, for private cars.
My Amendment goes further. Paragraphs (a) and (b)differentiate between vehicles whose weight exceeds 12 cwt. and those whose weight is less than 12 cwt. and which tow trailers. The numbers involved are not large. I do not think there are more than 3,000 cars of this category at the moment; but it means that there will be 3,000 puzzled, discontented and—financially—very heavily penalised people. If we suppose that the number concerned is 3,000, and that the average difference between the rate as at present proposed and the rate if my Amendment is accepted is £13 a year per car, that means that the total amount involved in each year would be under £40,000. I feel that that is an amount which the Chancellor might well consider, and I appeal to him to give special consideration to this case. I hope he will accept my Amendment.

§ Mr. Geoffrey Wilson (Truro)
I wish to support the Amendment. In my division of Cornwall, many of my constituents live far from the centres of population and they are unable to make 588 those weekly visits to football matches which appear to be essential to the constituents of certain other hon. Members, as one gathers from a debate which took place earlier. They live far from a railway station and some, even, far from a bus route; and if they wish to purchase anything, or to obtain their weekly stores, or even to obtain the food for the domestic poultry, they have to get it themselves. It is not unusual for those people, in such circumstances, to buy a utility vehicle and to use it as a private car.
When they have done so in the past they have had to pay a tax on this vehicle as a goods vehicle, although they were using it as a private car. They could never understand the reason, and I must say I have considerable sympathy with them in the feeling which they have that they are suffering from a grievance, because it is clearly anomalous that small number of private car users should be taxed on a different basis from normal merely because the construction of their car happens to be of a different type from that which is usual.
For some time the Treasury have been receiving a minute quantity of revenue from a small group of taxpayers for no other reason than that the Parliamentary draftsmen and hon. Members have been unable to discover a suitable form of words to express what is obviously the intention of the House. I am criticising neither hon. Members nor Parliamentary draftsmen for that defect. At one time I was employed in a capacity which necessitated my giving some attention to drafting protective Clauses in Private Bills, and I know from experience that it is more difficult to draft a Clause than appears to be the case at first sight. The difficulty here has been that so far nobody has been able to discover a form of words which is an adequate definition of a utility vehicle.
It seems to me that this Amendment provides a way round. As my hon. Friend the Member for Langstone (Mr. Stevens) has pointed out, Section 27 of the Vehicles (Excise) Act, 1949, defines a goods vehicle as meaning: A vehicle … constructed or adapted for use, or used, for the conveyance of goods or burden of any description whether in the course of trade or otherwise. 589 The Amendment provides that a vehicle over 12 cwt. unladen weight—and that is for the reason which my hon. Friend mentioned and to which I will refer again in a moment—which is a goods vehicle within the definition shall not be treated as a goods vehicle for tax purposes if it is not used for such conveyance for hire or reward or in connection with a trade or business. In other words, certain vehicles, at present paying Vehicles Excise Duty under Section 5 of the Vehicles (Excise) Act, 1949—that is the Section which imposes Excise Duty on goods vehicles—will, instead of paying that duty, pay instead under Section 6, which is the general sweeping up Clause applicable to private cars. The general effect of the Amendment would be to retain in the goods vehicle classes all goods vehicles which hold, or but for a statutory exemption would hold, carrier licences issued under the Road and Rail Traffic Act, 1933.
Thus, for example, an itinerant greengrocer using utility vehicles for the delivery of green groceries—and I may say that my own greengrocer does deliver vegetables at my own house in such a vehicle—will continue to pay tax for a commercial vehicle. Nevertheless, somebody using an identical sort of vehicle, as is the case of one of my neighbours, merely for going into the nearest town to collect the shopping, would pay the rate for the private car.
5.15 p.m.
I am afraid that any Amendment in any Section is liable to create some anomalies, and it may be that this Amendment will create some, for it would appear that certain types of people-such as a doctor, or a dentist or a nurse or a veterinary surgeon, using a utility vehicle and at the same time carrying certain apparatus or medicine, might nevertheless still have to pay taxation as for a goods vehicle, because they were using the vehicle in connection with a trade or business. I think it will be agreed by all hon. Members, however, that it is impossible to draw up a list of particular trades or professions which should be exempted, for if one started exempting any particular profession, there would be no end to it. If one exempted a veterinary surgeon, for instance, why not a surveyor or a dance band conveying its 590 instruments'? There would be no end to it.
The Amendment includes another very small class of vehicles where I think the effect may be useful. It will be observed that any goods vehicle which is not used in connection with a trade or business will be exempted, with one exception which I shall mention in a moment, and this would seem to mean that a certain number of vehicles which are ordinary commercial vehicles, but which are not used for commercial purposes, would be exempted such, for instance, as lorries used by the Red Cross or vehicles used by the A.A. or the R.A.C. for repair vehicles, or others used by the W.V.S. All those are not used in connection with a trade or business, and it would seem that they would be exempted, as a result of the Amendment, from paying the higher tax.
Hon. Members will observe, however, that there are some words in brackets in line 4 of the Amendment which would exclude from its benefit vehicles which are used by a local or public authority, because it is obvious that a lorry used by a local authority should not be exempted from the higher rate of taxation merely because it is not used in connection with a trade or business.
Finally, I have one comment to make on the figures of 12 cwt. It will be appreciated by all hon. Members that at present a goods vehicle of under 12 cwt. pays only £10 tax. It would be inappropriate, and quite impossible, in an Amendment such as this, to raise the taxation on such a vehicle to £12 10s., and exclusion is, therefore, provided in the Amendment for those vehicles. However, the owner of a vehicle under 12 cwt., which is drawing a trailer, not only has to pay £10 for the vehicle, but pays an additional £10 for the trailer and proviso (b) is added to the Amendment to exclude the trailer in those circumstances.
The net result of this rather technical Amendment seems to be this: that a goods vehicle which is a goods vehicle within the definition of the Act, will nevertheless pay the lower rate of taxation of a private car if it is not used for hire or reward or in connection with a trade or business, if it is over 12 cwt.; but if it is under 12 cwt., it will continue to pay the existing tax of £10 and no more, whether it has a trailer or not.

§ The Chancellor of the Exchequer (Mr. R. A. Butler)
In the atmosphere of sweet reason which is prevailing, I think it would be fair and reasonable that, after a concession to the other side of the Committee, one should also be made to my hon. Friends. May I congratulate them on the skill with which they have framed their very elaborate Amendment? I have tried very hard to improve it, but finally have decided that it meets all the difficulties which are inherent in making such a concession.
I have looked very carefully into the question of whether giving this concession would lead to the danger of abuse or evasion by commercial users of goods vehicles, and I am advised, after the most careful examination, that it is unlikely to do so. Nevertheless, I must give a warning which would cover myself, I hope for many years to come in my present office, or my successors in this office, that if an ingenious manufacturer contrived to develop a utility vehicle weighing less than 12 cwt.—the figure included in the Amendment—deliberately to exploit the £10 rate by its being capable of use as a private car without paying the E12 10s. flat rate, and thereby spoiling the sense of the Amendment, I am quite certain that we should have to look at the matter and to deal with it faithfully in any future Finance Bill.
I only put that in because I think that, subject to that, the danger of abuse is practically negligible, and this is a legitimate case which I am assured for some years has been regarded by the authorities as an anomaly. I am therefore glad to accept the Amendment.

§ Mr. Glenvil Hall
Will the Chancellor of the Exchequer either confirm or deny the cost? I think the hon. Member for Langstone (Mr. Stevens) said that he thought the cost would be in the region of £40,000 a year. Is that so?

§ Mr. Butler
As far as I can calculate, those figures are correct. As my hon. Friend seemed to be singularly well informed, I did not add further to the tedium of the Committee by repeating the matter.

§ Mr. Stevens
On behalf of the owners of these estate cars, of whom I am told there are 3,000, may I say how very much they will appreciate the Chancellor's generous acceptance of this Amendment.

§ Mr. Boyd-Carpenter
I beg to move, in page 8, line 14, at the end, to add: (4) For the purposes of section ten of the Vehicles (Excise) Act, 1949 (which relates to trade licences), a person who carries on a business consisting wholly or mainly of collecting and delivering mechanically-propelled vehicles, and not including any other activities, except activities as a manufacturer or repairer of, or dealer in, mechanically-propelled vehicles, shall be deemed to be a dealer in mechanically-propelled vehicles. This subsection shall be deemed always to have had effect. The purpose of this Amendment is to put beyond doubt the eligibility of the car collection companies to be entitled to use trade licences. As the Committee are no doubt aware, those are the companies which collect the cars at the works and take them either to the showrooms or to the ports. They have operated under trade licences, but a recent High Court decision on another point has raised some doubt as to whether they are eligible. It is quite clear that they should be. The cars are very often taken from the works to the ports overnight, and it would be very oppressive to insist on these companies taking out an ordinary licence for a period less than a month. To put the matter beyond doubt and to regularise the existing position, I am moving this Amendment.

§ Mr. Glenvil Hall
Would the Financial Secretary explain to us exactly why subsection (3) is inserted in the Clause? I have been looking at the Vehicles (Excise) Act, 1949, and have been trying to check the cross-references; I may have it right, but I have a strong suspicion that I have not. Would the hon. Gentleman please explain it?

§ Mr. Boyd-Carpenter
I am glad to do so. Subsection (3) arises from subsection (2). Subsection (2), as the Committee will note, secures that vehicles used for Civil Defence purposes shall be exempted from licence, but if the amendment made by subsection (3) were not made, that amendment in subsection (2) would be nugatory because it would still remain an offence to operate them without a licence.