HC Deb 12 December 1956 vol 562 cc447-571

4.2 p.m.

Mr. John Taylor (West Lothian)

I beg to move, in page I. line 15, after "oils", to insert except oils produced from shale mined in the United Kingdom".

The Chairman

It might be convenient to take, with this Amendment, that in page 2, line 10, at the end to add: (2) Nothing in this section shall affect the rate of duty on indigenous "Derv" oils.

Mr. Taylor

That procedure will be acceptable, Sir Charles.

We have just been considering whether we should give leave to bring in a Bill to decide which is the more humane way to slaughter animals. This Amendment endeavours to persuade the House against an inhumane way of slaughtering an industry. The chief importance of the Amendment is that it includes the pro- ducts of the Scottish shale oil industry, although it also covers all the products of any indigenous oils in the United Kingdom.

I want to refer to the speech of the Financial Secretary, on Second Reading, when he replied to the hon. Member for Scotstoun (Sir J. Hutchison) and to myself after we had stated the case for exemption of shale oil from these duties. I did not interrupt him after the right hon. Gentleman had made that part of his statement, because there had been many interruptions and I hold the view that these days there are far too many interruptions and I do not want to add to the number. I hope that he will forgive me if I mention his statement today.

In rejecting our plea, he said that we had talked entirely of the long-term future of the industry which was not appropriate to the terms of the Bill. What we were trying to do was to make it clear that the industry will not have a long-term future unless the Chancellor now takes some action. The Chancellor could give relief to the industry by accepting the Amendment and thus ensuring a long-term future for the industry. The right hon. Gentleman said that the industry was subsidised at the rate of £1 million a year.

There were two things wrong with that statement. The first was that the industry is not subsidised, and never has been subsidised in all its long life, and it is the world's pioneer oil industry. Never in the one hundred years of its existence has it received a penny subsidy from State funds. It is protected. The second thing wrong with the sentence was that the industry is protected, not to the extent of £1 million a year, but to the extent of only £762,000 a year.

What is really happening in the shale oil industry is that during the present emergency the Treasury is deriving from it an income at the rate of £1,372,000 per annum. That is an income which the Government would not get if shale oil were replaced by imported oil. The industry, which is producing that income for the Treasury, is working at a loss. That is an intolerable situation. No industry can continue to operate at a substantial loss; it certainly cannot continue for very long.

The issue put squarely before the Government by the Amendment is whether they want the oil, or the money. If they decide in favour of the money, they will get it for a short period and then it will stop. If they decide in favour of oil, they will continue to get it for decades to come.

I am sure that the Government do not really want to kill an industry by insisting on a miserable pound of flesh—that is not an exaggeration. If they want to preserve one of our few sources of oil—and there are lamentably few, because of our geological position, which we cannot do much to improve—they do not want to kill that source.

Government spokesmen deny that a remission or exemption of tax either under this Bill, or in the general context of the Budget, would prolong the life of the industry. I assure them that they are wrong. I do not know how I can impress upon them how wrong they are. It was some decades ago that an hon. Member, trying to find words to impress on the Government that they were wrong, used the graphic expression, "By the bowels of Christ, cannot you conceive that you may he wrong?" In this case, the Government are wrong. I borrow that graphic phrase to try to impress upon them the fact that they are adopting a foolish and indefensible position.

I do not know whether the Minister has seen this morning's Scotsman—a newspaper with a very high reputation in Scotland, which never in its history, I believe, has been a staunch supporter of my party. It contained a leading article on the matter, from which I should like to quote. It said: We rightly subsidise agriculture; the railways are subsidised, or allowed to accumulate deficits, which will come to the same thing in the long run. Yet home oil cannot be relieved of a crippling burden, let alone get a subsidy. That is one of the milder portions of the leading article. I mention it to show that there is a great deal of feeling in Scotland about this matter.

My hon. Friend the Member for Midlothian (Mr. Pryde) and I have been plugging this subject for many years. In the Budget and Finance Bill debates I described it as a half-hardy biennial. My hon. Friend the Member for Midlothian has been trying to fight this battle for eleven years and I for the last five years, without success, but now the whole of Scotland seems to be seized with the importance of the principle lying behind the Amendment.

The Government's response will be watched very anxiously. Hon. Members opposite know this. It is not an accident that a similar Amendment appears on the Notice Paper in the names of hon. Members opposite. I am sure that everyone in Scotland knows that the Government have not the vestige of a case in this matter.

In another column of this morning's Scotsman there is a report that the Government have decided in advance not to accept the Amendment. It is said that the Minister of Fuel and Power had a secret meeting with some of his hon. Friends, upstairs presumably, last night, in which he said this. It is not a very good way of dealing with a matter to decide about it in advance without hearing the arguments, although, in this case, the arguments are not new to the Treasury Bench. In the context of the Bill and in the present circumstances, however, when every drop of oil is of inestimable value to the nation, it was not good tactics to reach a decision and to convey it in that way, before the Bill had reached the Committee stage.

One can always understand that there is a mental miasma which clouds the minds of hon. Members who become Treasury Ministers. They think of nothing but how they can rake in the shekels. It is a difficult task to convince them, although they have been partly convinced in principle upon this issue, as is shown by their exemption of heavy hydrocarbon oils. The principle has been conceded in part. We now hope to persuade the Government to exempt the home section of the hydrocarbon oil industry.

But this announcement was not made by the Treasury; it was made by the Minister of Fuel and Power, who told certain hon. Members that the Government were going to reject the Amendment and the principle behind it in advance, at a time like this. What sort of Minister of Fuel and Power is this who, at this time, refuses to encourage, support and guarantee the future of the home oil industry? I do not know what feeble influence is at work in our Ministers today. It seems that the proverb which says: Whom God will destroy he first of all drives mad has some application in this case.

4.15 p.m.

I am sure that a case for the Amendment has been proved and that no stronger case for exemption exists. There are some very strong cases to be made why certain sections of the hydrocarbon oil industry should receive remissions or exemptions from this duty, but I do not think that any have a case as strong as this one, because it means the survival of an industry. It is not, as the hon. Member for Scotstoun said on Monday, during the Second Reading debate, that the industry is in decay. It is a live and virile industry which, because of the circumstance that its selling price is governed, not by its own efforts, but by forces outside its control—because its market price is fixed by the price of imported oil—is losing money. It is not in decay; it is being strangled.

The Amendment provides a way by which the Government can loosen the rope round its neck and give it scope to breathe and have a reasonably fertile and prosperous future life.

Mr. W. G. Leburn (Kinross and West Perthshire)

Like the hon. Member for West Lothian (Mr. J. Taylor), I believe that if the Government accepted the Amendment it would be a great benefit to the shale industry. I am especially interested in the Scottish section, but the benefit would be spread over the whole of the United Kingdom. I believe that it would benefit not only the shale oil industry, but the nation as a whole.

Over the past years the industry in Scotland has been contracting. Decay has certainly begun to set in. In Scotland, the production of derv—the product in which I am primarily interested—was only 9,400,000 gallons last year. This figure is one half of the possible potential, based upon the figures of some years ago. Rightly or wrongly, it has been the Government's policy to do nothing to arrest that decline.

Viewed purely from a Treasury point of view, that is understandable. The industry is worth much more to the Treasury dead than alive because, whereas, upon imported oils, it receives 2s. 6d. duty per gallon, on home oil it receives only 1s. 3d. In June, through the then Economic Secretary, the Government showed that they had lost interest in the industry and they said that unless it could be made economic they could not do anything for it.

Since June, circumstances have altered. New factors have been brought to light and I believe that owing to the crisis in the Middle East and the alteration in our supplies of oil the time has come to do something more to nurture our oil industry. We should face the fact that the position has radically changed. I am speaking only from the premise of augmenting our oil supplies. A few weeks ago, before the crisis, our home oil supplies were looked upon as a luxury. They should now be looked upon as a valuable standby. Before the crisis they were on the pinnacle of the tower; now I believe that they could form one of the piles to carry the foundations.

The industry gives us only a very small amount of oil, but, none the less, it is a basic supply which helps to keep our essential services running. It would help even if there were a total or a partial disruption of our imports. But if the industry is to be sustained then, as the hon. Member for West Lothian said, it must have a greater differential in price. This can only be achieved through a greater differential in duty than exists at present. With the differential at 1s. 3d. a gallon the industry is not economic.

Last year the industry in Scotland lost about £200,000. If, under this Bill, the indigenous product is to bear an increased tax of 1s. per gallon, the differential will remain the same, although, of course, the percentage differential will be reduced.

By way of reinforcing what has already been said, I wish to say that I could never agree, as was suggested by my right hon. Friend during the Second Reading debate, that the industry has been subsidised. I could, perhaps, agree that it has to some degree been protected, but there is a very fine distinction between "subsidised" and "protected." If the proposed extra tax of 1s. were to be remitted, the Treasury would, so far as revenue from home oil was concerned, be no worse off than it is at present.

If this Amendment were accepted it would give some encouragement to the home industry. It would indicate that the Government had accepted a new principle towards the industry, and, most important of all, it would, I think, establish the principle that there ought to be a greater differential than that of 1s. 3d. per gallon. On the amount of derv produced in Scotland last year the remission of this extra tax would mean a loss of revenue of 9,400,000 shillings, or £470,000. Surely that is a comparatively small sum well worth contributing to the resuscitation of this whole industry. I think it would be a reasonable premium to pay to ensure at least part of our basic supplies of oil.

As was said by the hon. Member for West Lothian, if nothing is done to help the industry it will progressively decline which will mean that at some future date there will be no revenue from the industry at all. I ask my right hon. Friend to look at this proposal in the light of a contribution to a Premium Savings Bond: so that no matter what happens to the rest of our investment portfolio we can here at least get our money back, and even, may be, win a prize.

In his statement on 4th December, my right hon. Friend the Chancellor said that he considered it wise to buttress this precious liquid. Surely one of the best ways of doing that would be to boost home production. During the Second Reading debate my right hon. Friend the Financial Secretary suggested that the long-term future of the industry could not be dealt with within the confines of this temporary Bill. I admit that there are some arguments in favour of that statement. But is that approach not too simplified and too sweeping a disposal of the whole subject? Could not the principle of a wider differential be established in this Bill, or, at least, the percentage differential maintained?

Even if the Amendment cannot be accepted by the Government, could not my hon. and learned Friend perhaps indicate that some encouragement will be given to the home industry, an industry which could offer us supplies of oil and, possibly, considerably more of this precious liquid than we are getting at present?

Mr. David J. Pryde (Midlothian)

I strongly support this Amendment because over many years now the House has heard me draw attention to this relatively small industry in Scotland, which, as I have pointed out on several occasions, may yet be the saving grace of our country. There may be some substantial proof in what my hon. Friend the Member for West Lothian (Mr. J. Taylor) said about a meeting upstairs last night. I listened last year to two disciples of this so-called free oil and I regret that the difficulties which we face down here arise from the fact that the majority of the people are starry-eyed because of the inflow of what they call free oil.

We are told that the native product is at a disadvantage. That is just sheer nonsense. The native product is not at a disadvantage with any other oil. When one goes into detail and takes into consideration all that the British taxpayer has had to pay to get a supply of this so-called free oil from the Middle East, and when one realises that the present interruption in our supplies may by no means be the last which we shall experience, then we are faced with the fact that we must do what the Chancellor told us to do last week—something for ourselves.

What has to be done can be done in the East of Scotland, where we have such valuable deposits of shale. Is it true to say that this industry is not washing its face? When everything is added up we shall find that the shale industry in Scotland is making, and can go on making, valuable contributions to the welfare of Britain.

The Scottish Press tells us that the United States Government are now spending vast sums of money on oil research, and when I tell the House that the first pint of oil produced in America was produced from a shipload of home-mined shale in Midlothian, it will surely provide food for thought. Throughout West Lothian, Midlothian, the Firth of Forth and across to Fife the shale deposits lie. We do not require to bore in Midlothian. At Loanhead, a good going concern was closed by the action of the neighbouring house because it had undermined the pipeline of the Edinburgh Water Trust. It lost in court. We do not require to bore to substantiate our remarks about supplies of oil.

Last night the disciples of free oil told us that it would take a great deal of coal to retort this shale. That is all nonsense. In the county of Midlothian alone there is a seam which produces 51 gallons of petrol to the ton. Half of it is coal and the valuable by-products produced as a result of those operations are quite sufficient to demonstrate that in Scotland we have a great asset which is being neglected.

I do not want to go into great detail on this argument. All I want the Government to understand is that Scotland's shale industry today is suffering from the inheritance of the past. We had the old machinery which has been used since time immemorial. Fortunes have been made in the shale fields of Midlothian and fortunes still lie there which could he obtained by the application of modern machinery. In the City of London I have consulted technologists and engineers who have told me, "It is all nonsense; there is no decay in the shale industry." They were quite prepared to put their services at the disposal of the Government in order to develop the industry in West Lothian and Midlothian.

4.30 p.m.

I appeal to the Government to take steps now to do something for ourselves, because we cannot always trust to the good humour of the people in the Middle East, and in the event of a war I shudder to think what would happen to Britain. Look across the Atlantic and see what America is doing. At Laramie, Wyoming, America has developed research to such an extent that it causes one to think that she also has peered into the future and is determined to be prepared for future development.

It is not only a question of the long-term future. We know that retorting machinery can be produced quickly and would be a short-term business. I am anxious about this industry, because in a shale area like West Calder an alternative industry has not been introduced and our men there are still very ready and willing to do their part. It has the finest record of any industry in Britain. There has not been a strike in that industry since 1924.

I appeal to the Government to put the machinery into operation now and give them a little encouragement through the medium of the remission of this tax. By that means we shall set an example to the people of Scotland which will pay heavy dividends in the future.

Mr. J. C. George (Glasgow, Pollok)

This debate reminds me of another sad event in Scottish history which, hon. Members will recall, was described as. "The end of an Auld Sang." This ancient and romantic shale industry is under sentence of death. While romance may not enter the Treasury door very often, I hope that the serious views expressed on both sides of the Committee today will, in fact, be heeded.

The shale industry is a romantic industry. It goes back many years, starting with the great torbanites of Scotland, which gave us our gas and oil. Great prosperity came to Scotland through these oil-bearing coals. They lit our homes and streets not only here, but in many countries overseas. The incandescent mantle came in and caused the sudden doom of those valuable seams; their working was stopped. They remain unworked today, but they are there and easily worked if we should need them.

The torbanites were followed by shale and we have heard the hon. Members for West Lothian (Mr. J. Taylor) and Midlothian (Mr. Pryde) express their anxiety that this ancient industry should not die. We in the mining areas look back on it with some affection. In the mines we were dependent on tallow oil to keep our lights going. Hon. Members opposite will remember many of us filling our pockets in the morning with those long, rectangular blocks of tallow which we broke up bit by bit to fill our lamps, to give us light to enable us to earn our living and win the coal. We have had tallow, paraffin and candles in Scotland from shale long before the internal combustion engine came to help and plague us. Of all these products—tallow, paraffin, candles and oil, only oil is left, and if the present intentions are carried out that will go the way of all the rest.

What the incandescent mantle did for torbanites, the Chancellor proposes to do for our shale. I wonder whether he is right. I would not, under normal circumstances, support the subsidising of industry. I have seen too much inefficiency and destruction of management morale caused by subsidies to press for that under normal circumstances. But when we see hon. Members on the other side deserting their dear principle and pleading for support for private enterprise, we must feel that these are not normal conditions; something abnormal is being done and when we unite with them I hope that it will be taken as a sign and a warning that something should be done.

Mr. Leslie Hale (Oldham, West)

What is this principle which we are supposed to be deserting? We have bolstered up the aircraft industry, given subsidies to agriculture, and subsidised a great many necessary industries. If the hon. Member is trying to persuade us to agree with him, it is a little tactless of him to introduce these entirely irrelevant and party observations.

Mr. George

I always understood that the party opposite stood for full State control of all means of production, distribution, etc. I have heard throughout many years of their intention to nationalise the heavy industries, and many other industries. Today, we hear them pleading for assistance for private industry, and the point I want to make is that this is an important change and should be attended to by those responsible.

Mr. Hale

What about the Bill to subsidise the cotton industry?

Mr. George

Death is always a sad event, but avoidable death is deplorable. If a doctor is careless, and death ensues, we are indignant, but if a doctor allows his patient to die because he cannot pay the fee, we are righteously enraged.

That I think, is what is happening to the shale oil industry today. It is not paying to the Treasury what the Treasury could get by closing the industry and increasing imports from overseas. Therefore, it must die. It is rightly pointed out that the industry is not subsidised in the ordinary sense of the word. The fact, as I have said, is that it is not paying as much duty on the oil sold in this country as would be raised from a smaller quantity of oil brought in from overseas. If this industry were stopped, the effect would he to increase our imports and in that way get more duty. Is that a sound policy in these days in which we live?

The point was raised by the hon. Member for West Lothian that the Minister of Fuel and Power gave, as his opinion, that the quantity of oil produced in Scotland was insignificant. A percentage of 0.25 of the national usage of oil comes from this industry and he says that that is insignificant. I would ask him what word he has for the loss to the Treasury through this industry operating. The loss to the Treasury is .005 per cent. of the national yield from taxation. If 0.25 per cent. is insignificant, what is .005 per cent.? That would result in the production of 80 per cent. of the oil necessary for Scottish transport. Is it really a serious loss?

We in Scotland think that the loss to the Treasury is insignificant, but a loss of 19 million gallons of oil in these days is really significant, and should be avoided. I quote what the Chancellor said when speaking in the Trinidad Oil debate: The oil supplies and even the probable oil reserves of Trinidad are not important in terms of modern oil production. They have no broad strategic, and little economic, significance. … The fact that they are small … makes them … more … precious … We would say that too about the shale oil yield. The fact that it is small, and cannot be enlarged, makes it more precious.

The right hon. Gentleman went on to say: It is easy, of course, to play upon emotions of this kind. I know that we shall be charged with putting forward just a Scottish local point of view. But let me read on: It is easy to make appeals, to appeal to different sections of a community, but I think we should have regard to our larger and our more permanent interests."—[OFFICIAL REPORT, 20th June, 1956; Vol. 554, c. 1444.] Well, in the light of events in recent weeks, I think that that is just what we are doing in pleading for the continuance of this industry. I claim that we are looking after our more permanent interests and I ask the Minister to regard the matter in that way.

With the knowledge we possess today, I cannot remain silent and see this industry assassinated. I am dismayed at the unconcern and indifference shown to this problem by Ministers in various Government Departments. [HON. MEMBERS: "Hear, hear."] Do not these right hon. Gentlemen see that the distress voiced on both sides of the Committee is real? Genuine distress is being shown over this industry. I wish to suggest a cure which has not yet been referred to. I believe that this industry is unwanted. It is unwanted by the Chancellor and I do not believe that it is wanted much by the owners. I believe that the owners would far rather see the oil come in from overseas, because that would be far easier, and would cause much less trouble to them.

I am not prepared to see these mines become silent and the machinery stopped. I do not want to see these great capital structures rendered useless, and perhaps villages, halls and schools deserted. I think it may well be unnecessary. Following the remarks of the hon. Member for Midlothian, I wish to make a suggestion to the Minister which may shock my hon. Friends. We are told—I have no actual details to support what I am going to say—that the industry is making heavy losses. We are told that the industry has no future. If that be so, it could be bought at scrap value in the ordinary course of business transactions.

Therefore, I suggest that the Minister of Fuel and Power should ask the N.C.B. mining engineers, coke experts and scientists to survey this industry with a view to purchasing it. If it is said that there are no existing powers to do this, I think that the House of Commons would readily grant these powers.

Mr. William Ross (Kilmarnock)

The hon. Gentleman does not know his own side.

The Temporary Chairman (Major Sir William Anstruther-Gray)

Order. I hope that the hon. Member will bear in mind that he is discussing a narrow Amendment, and will not stray too far from the point.

Mr. S. O. Davies (Merthyr Tydvil)

It is a matter of life and death, in many cases.

Mr. George

Thank you, Sir William, but I think, as was said by the hon. Member for Merthyr Tydvil (Mr. S. O. Davies), that this problem involves the death or the life of the industry and, therefore, that we should discuss the ways of keeping it alive. The Amendment suggests one way and I am extending that a little. But I will try to avoid going further with that argument.

My feeling is that if the industry s dying it is not likely to be efficient. I know that it could be widely mechanised underground. I do not think that the distillation part is too bad. I ask for a survey to be made by the N.C.B. people with the object of expanding this industry, and until that is done I shall not be satisfied. I feel that the shocks which we have had in recent weeks should make us look deeply into the subject. If the Government have not been shocked by the terrifying possibility of the stoppage of our oil supplies, the nation has. If the Government are comforted by the feeling that this will not happen again, the nation is not.

If the Minister could match his new and courageous atomic energy programme with a decision to rescue this industry, and to conduct a survey with a view to expanding home oil developments, I am certain that he would have ready support. That is the mood of the people, and I hope that this time we shall match that mood with action.

4.45 p.m.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

A great deal has been said about losses, but the figures show that there is no such thing as actual industrial losses in connection with this industry. The talk about losses reminds me of the economics of a farmer who was discussing his affairs with a friend of mine. He said that last year he lost £600. My friend said, "How could you possibly lose £600?" The farmer said, "I calculated that I was going to make a profit of £2,000 and I made only £1,400, so that I have lost £600". That seems to be the economics of the Treasury in relation to this industry.

With the hon. Member for Pollok (Mr. George), I can speak with some knowledge of costing in industry, because for many years it was part of my interests to do that sort of thing. In this country there are firms which take orders from abroad and do not even get their full on-costs covered by those orders. But if they get part of their on-costs, that avoids a loss. Any part of their on-costs is a contribution to the running of the industry. It is true that the British Petroleum Company is so enormous that it appears nonsense to that company to have this little bit tacked on to it although the head of that industry—I remember his father very well—was one of the heads of Scottish Oils and started his life in that area.

Not only is this industry not losing money, but if it disappears, there will be other losses to the Treasury which are never taken into the balance sheet. If this industry disappears and if villages go out of commission, and it is necessary to pay unemployment pay to people for the rest of their lives, it seems foolish to call that profitable. If we give a deathblow to this industry and at the same time cause large numbers of people to be dependent on the community, that appears to be false economy.

My hon. Friends and the hon. Member for Pollok have made out a strong case. In previous debates it has been explained that many of the men working in the industry are too old to be absorbed into other industries and therefore there will be no possibility of a transfer of employment for them. The other day the Chancellor seemed to understand the common sense behind an interjection which I made, when I said that it was a foolish thing to allow an industry to be closed down when our need for petrol was so desperate.

Every drop of petrol coming into the country is paid for in dollars. This country invested £300 million in the farming industry in order to stimulate it as an indigenous industry and to avoid using dollars to purchase food, and here we are grudging the money to save this little industry, which has a social as well as an industrial value. This industry is valuable as part of our economy and it is important that it should be kept in existence.

From the point of view of the Treasury this may appear to be a matter of no importance, but I can assure hon. Members that that is not the feeling in Scotland, and the feeling there is not confined to one political party. The hon. Member for Scotstoun (Sir J. Hutchison) who is unable to be present this afternoon, told me that he was sorry he could not be here to speak strongly on this matter.

Hon. Members who have spoken this afternoon are speaking on behalf of a great many people. I hope that we shall not see this matter brushed off by the Treasury with easy-osey arguments that will not convince us in the slightest. I hope that we shall see the gesture of the Chancellor translated into action and that this matter will be considered by the Treasury. I hope that the small amount of help required will be given to the industry to keep it ticking over and even expanding if possible; so that the long-term policy may be settled, not on an industrial "death bed" but while this industry is still alive.

The Economic Secretary to the Treasury (Mr. Derek Walker-Smith)

It might be convenient if I followed the right hon. Gentleman the Member for East Stirlingshire (Mr. Woodburn) and indicated the Government's view on this important question. The hon. Members for West Lothian (Mr. J. Taylor) and Midlothian (Mr. Pryde) are, as the right hon. Gentleman said, old campaigners in this cause. Since 1955, Scotland has certainly gained two notable recruits in the promotion of her special interests, in the persons of my two hon. Friends who have spoken in the course of this debate.

As a preliminary, may I comment on the form and effect of the two Amendments which we are discussing? As my hon. Friends are aware, I was concerned in the last Session with two very long, technical and complicated Bills, and I made clear on many occasions the fact that I never based my arguments on drafting points where they were capable of being set right, and that I preferred to discuss the principle intended. It is, however, my duty to indicate the technical effects and defects of the Amendments which the Committee is being asked to accept.

Let me take the first Amendment, in the name of the right hon. Member for East Stirlingshire. It is defective as it stands, because it excludes shale oil from a duty which does not apply to it in any event. The duty, under Section 2 of the Finance Act, 1928, is restricted to imported oils, and it is by the other Acts and Orders referred to in Clause 1 that shale oil is brought in. My hon. Friend's Amendment is defective for a different reason. Derv is not statutorily defined. The Amendment of my hon. Friend the Member for Kinross and West Perthshire (Mr. Leburn) would involve a consequential amendment in the Customs and Excise Act, 1952.

Mr. Gordon Walker (Smethwick)

That would be quite easy to do.

Mr. Walker-Smith

Not in the Amendment as it is at present drafted. I was only pointing these matters out because I thought it right that the Committee should realise what it is being asked to pass. Whatever the merits of their intention, the Amendments are defective in form.

The purpose of the right hon. Gentleman's Amendment is, of course, to exempt indigenous shale oil from the increased duty. My hon. Friend's Amendment is somewhat different, because it would exempt what he calls "indigenous derv oils". I understand that shale oil is 80 per cent. derv, the residue being light oils. Indigenous derv is mainly but not wholly derived from the Scottish shale oil industry. The two Amendments are not quite the same in their effects, but broadly I take it that we are discussing the maximum effect of the two Amendments combined.

On the question of cost, the hon. Member for West Lothian criticised my right hon. Friend the Financial Secretary for using the word "subsidy". We need not get into any conflict on a question of nomenclature. It is, in effect, the amounts of the preference margin or differential—if we can agree on that nomenclature—which are important. What my right hon. Friend was referring to in the Second Reading debate, by his figure of £1 million, was the amount derivable from the 1s. 3d. duty on the products of the shale oil industry, that is to say, the 80 per cent. derv to which I have referred and the 20 per cent. residual light oil. The figure of £800,000 is that which would be lost in a full year if the 1s. increase were disallowed by a decision of Parliament. Of course, for the purposes of the present financial year—this is a temporary Measure—it is one-third of the £800,000.

Mr. Woodburn

I am interested in this new philosophy. Does that mean that motor cars, which are protected in this country, can now be referred to as being subsidised by many millions of pounds? Is that a loss or a profit? It is not being got from imported cars.

Mr. Walker-Smith

I thought we had agreed not to quarrel on the question of nomenclature. I am obliged to the right hon. Gentleman for the compliment that I was making a philosophic disquisition. I was merely giving to the Committee figures of which I think the Committee should be in possession. It is argued by my hon. Friend the Member for Pollok (Mr. George) that this is a small proportion of the total revenue available to the community. In this predominantly Scottish debate the right answer is, "mony a mickle maks a muckle". From the Revenue point of view, we have to have regard to these various mickles.

If the Committee is concerned as to the relative amount of support given to the industry by the preferential margin—if I may put it in what I hope is a neutral form—the £1 million works out at about £6 per week per person employed in the shale oil industry. That is a substantial amount to derive from this preferential margin.

In the Bill we are concerned with an emergency measure, the increase of 1s. over a temporary period of oil shortage. I think that the country would agree that in the nature of things preferences are more required in times of glut than in times of shortage. The hon. Member for West Lothian when he initiated an Adjournment debate on this subject, to which I had the honour of replying in another capacity, said: It is in fact cheaper to carry crude oil thousands of miles overseas in expensive tankers, sometimes at dollar cost, and to refine it in great modern refineries, such as the one in Grangemouth in the neighbouring county of Stirling, than to produce it by laborious processes from our native oil deposits."—[OFFICIAL REPORT, 16th February, 1956; Vol. 548, c. 2658.] The effect of the present position is to give protection to indigenous oils and to derv as against imports. Secondly, they receive extra help through the price increase in derv which is imposed to meet the extra cost arising from the difficulties in the Suez Canal today to which the indigenous industry is not exposed.

It might well be argued that if the circumstances and disabilities under which imported oils were placed dictated any change they might dictate it in the opposite direction. If I were a hardhearted economist instead of a warmhearted and simple lawyer, it might be appropriate to argue that from the Box. It is clear that hon. Gentlemen opposite are concerned more with the permanent position than with the temporary position for which we are catering in this Measure. The difficulty there is that if hon. Members wish to use the Bill as a mechanism to deal with the preference margin that is to some extent an argument for the permanence of the Bill and it would be wrong to pursue that trend of argument.

5.0 p.m.

I agree that there might be, in the circumstances of the day, a case for relief on physical grounds, if it could be shown that an exemption from the shilling increase could bring any immediate increase in the supply of oil. It is true, as the Minister of Fuel and Power has been quoted as saying, that in fact the amount of oil represented by the indigenous shale oil industry is only 0.25 per cent. of our total oil consumption. That is a very small fraction. Even accepting that it is a small fraction, there might still be a case if it could be shown that there was a possibility of an immediate increase in output by reason of the exemption from the duty, but when my right: hon. Friend the Minister dealt with that, in reply to a Question on 26th November he stated: The company informs me that the throughput of the industry is already at a maximum and could not be increased without large-scale reorganisation which would take several years to carry out"—[OFFICIAL REPORT. 26th November. 1956: Vol. 561, c. 14.] I wish to say a word or two about what one of my hon. Friends called the principle of a wider differential. He also prayed in aid what he called the percentage differential. I will deal with the history of this matter. These particular types of indigenous oils were exempt from duty—that is to say, they carried no duty—until 1950. At that time and from 1938 the ordinary duty on light oil was 9d., so in fact there was a preference margin of 9d. in favour of this indigenous oil. It is from that and not from any percentage calculations that the 9d. traditional preferential margin arises.

In 1950, under the Administration of right hon. Members opposite, the light oil duty was increased from 9d. to 1s. 6d. and the indigenous oil—for the first time—became subject to duty, a duty of 9d., thus preserving the differential of 9d. The following year right hon. Members opposite again increased the light oil duty, that time by 4½d. They consequently increased the duty on indigenous oil by 4½d., thus still preserving the preference margin of 9d. In 1952 there was a further increase in the light oil duty and a consequential corresponding increase in the indigenous oil duty still preserving the differential margin, but in 1953, under the present Administration—

Mr. Hale

It was the present Administration in 1952 also.

Mr. E. G. Willis (Edinburgh, East)

What has all this to do with the argument?

Mr. Walker-Smith

Even though the hon. Member for Edinburgh, East (Mr. Willis) asks the question unconventionally from a seated position, I will explain what it has to do with the argument. One of my hon. Friends—perhaps the hon. Member was listening with less than his usual attention when this point was made—argued that we should preserve what my hon. Friend called a percentage differential. I am indicating that there has never been a percentage differential under either the present or the former Government, but the present differential of 1s. 3d. brought in by this Administration in 1953 was an improvement on the traditional 9d. differential. Therefore, the differential at present of 1s. 3d. preserved by this Bill is in fact larger than the differential at any time between 1938 and 1950.

Mr. Leburn

I quite see the point made by my hon. and learned Friend, but he will agree that the coincidental differential of 1s. 3d. to 2s. 6d. is in fact 50 per cent. and it is a rather neat figure?

Mr. Walker-Smith

I would not quarrel with the impeccable arithmetic of my hon. Friend. I merely give him this problem, if he wants to insist on the percentage basis, to work out what was the percentage factor at the time between 1938 and 1950, when the light oil duty was 9d. and the indigenous oil duty was nothing. It is clear that one could not preserve that percentage factor.

Mr. Hale

If we are to transmute these important matters into mathematical terminology, has it occurred to the hon. and learned Gentleman that the straw which broke the camel's back could be described as a .0001 per cent. differential?

Mr. Walker-Smith

I think the hon. Member for Oldham, West (Mr. Hale) is trying to invert my argument about "Mony a mickle maks a muckle." I do not think that it would be in order to pursue this fascinating mathematical exercise—

Mr. John Rankin (Glasgow, Govan)

The hon. and learned Gentleman started it.

Mr. Walker-Smith

It would not be in order to pursue it in relation to the straw which broke the camel's back. I confine my statistical observations to the matter under discussion, namely, these indigenous oils.

Turning to the general context, the hon. Member for West Lothian, in the course of his excellent speech in the Adjournment debate in February to which I have referred, said: We would regard this process"— that is the dying out of this industry— calmly if we could get some compensating industry to take its place, but the closure of the part of the oil industry that affects West Lothian is only part of the industrial picture in my constituency. In reply to that, I said: One must accept this closing as being evidence of the general vulnerability of the local shale oil industry and as reinforcing the desirability of introducing new industry if possible."—[OFFICIAL REPORT, 16th February, 1956; Vol. 548. c. 2658 and 2662.] I certainly have every sympathy with the social considerations which underlie a great deal of the argument which has been brought forward. The Committee will be universally glad that there is no unemployment problem at present in the shale oil industry. It had a percentage of only 1.9 per cent. in November compared with the generality of Scotland 2.3 per cent.

Mr. J. Taylor

The reason why at the moment there is no unemployment is that Scottish Oils Limited has agreed to continue the employment of a considerable number of its men who would be redundant because of the earlier closures, but they are being employed on demolishing the works which would have given them future employment. That is not a lasting nor a healthy means of employment.

Mr. Walker-Smith

I agree that that is a fair point. The employment of those men in that way is temporary and, therefore, is a wasting asset. It reinforces the desirability of introducing a diversification of industry which, as the hon. Member knows, is very much in the mind of the Government.

In conclusion, in my submission to the Committee in respect of these sympathetic considerations to which voice has been given, action in the way suggested is clearly inappropriate now—not only, or mainly, because of the drafting defects, which are incidental, but—because this is a Bill dealing with a temporary situation, and what is really in mind is a more long-term situation.

Mr. Frederic Harris (Croydon, North-West)

In the whole of his argument my hon. and learned Friend has referred to "temporary". Will he try to define "temporary" in the way in which he understands it?

Mr. Walker-Smith

If I may be permitted to reply to my hon. Friend, I would point out that there is an Amendment, to be discussed later, in which that is attempted. The Committee will then have the advantage of a lucid exposition by my right hon. Friend the Financial Secretary to the Treasury.

The general position can be discussed again on the Finance Bill in the general context, as it has been discussed in the past. The position of indigenous oil will be taken into account in the general review of Government policy in regard to energy, to which my right hon. Friend the Chancellor referred in his statement on the 4th of this month. In such a review I agree that the cost to the Exchequer obviously must be taken into account in relation to the advantages to the nation of an indigenous supply of oil.

These Amendments are inappropriate at present, and in the general context. I ask the Committee not to accept them.

Mr. Rankin

So far as I followed the hon. and learned Member's argument it amounted to this: after he had consulted the owners, he was assured that this industry could not be developed any further than its present stage of development.

Mr. Ross

Immediately.

Mr. Rankin

Immediately. He also led us to believe that in any event the industry was not worth developing because it was too small and that it had no contribution of any significant account to make to the solution of our difficulties. When I heard him saying that, it brought to my mind the White Paper on the farming industry which was presented a fortnight ago, in which agriculture was promised guarantees and grants amounting to £1,150 million a year, in addition to a £40 million yearly grant as a protection against rising costs and a £50 million grant in order to encourage investment.

The Temporary Chairman

Order.

Mr. Rankin

I am using this only as an illustration, Sir William, and I will finish in a minute. When the Minister of Agriculture came forward with his proposals—

The Temporary Chairman

Order. It would be much better if the hon. Member would concentrate his remarks on the Amendment.

Mr. Rankin

I was about to observe that when the Minister presented his White Paper he did not neglect the small farms on the ground that they did not make a large enough contribution to farming. He took the point of view of the hon. and learned Member in saying that "every mickle makes a muckle". The hon. and learned Member agrees with that. In that respect the contribution of the shale industry at the moment is important not only to Scotland, because this is not merely a Scottish problem but a United Kingdom problem.

We are now gasping for oil and are hoping that America will send it to us as quickly as possible from the Caribbean. Every ton which comes from that source will cost us £7 in freight. That charge has risen from £3 in June to £7 now. The Minister prefers to pay that sum to giving some help to the shale industry, which could make a little contribution. He has emphasised that it is a small contribution, and we on this side of the Committee do not disagree with him. But what would that little contribution from the shale industry represent in terms of driving motor buses along the roads? It would mean that from 75 to 90 per cent. of the buses now moving on the roads of Scotland could be driven by the oil, the derv products, from the Lothian minefields. Is that a small contribution?

If we turn this into motive power, which is the way, I submit, the Minister should consider the problem, it represents a motive force which will move from three-quarters to 90 per cent. of Scottish buses along the roads. In doing that, it will withdraw the demand which those buses are placing on the oil being brought into this country. This Government allowed the stocks of oil to run down to danger level as part of the preparation for their misguided venture in Suez—an adventure part of the effects of which we are now feeling. The Government are gasping for oil, and when they bring it into the country the freight cost will be £7 for every ton. Despite this, the hon. and learned Gentleman says that the little help which he can get from Scotland is too small.

I hope that we have not heard his final word on this matter. He has to some extent kept the door open. I admit that we are looking at the long-term interest of the industry, but we are also looking at the immediate help which the industry can give in the oil problem as it applies to Scotland and the help it can thereby give to the United Kingdom.

5.15 p.m.

If I may return to the remarks of the hon. Member for Kinross and West Perthshire (Mr. Leburn), what we are asking, in effect is that the preferential rate shall be raised from 1s. 3d. to 2s. 3d. a gallon. We are asking for an increased protection for this oil against imported oils—a protection increased from the present rate of 1s. 3d. to 2s. 3d. In any event, the hon. and learned Member will get that request later. Why not save time and trouble by dealing with it now and, on reconsideration, before the Amendments are finally disposed of, agreeing to accept our proposals?

I know that the hon. and learned Member has advanced many arguments about the technical defects which cluster around the Amendments, but he agreed that he would make no point of them. Having said that he makes no point of the technical weaknesses, all he needs to do is to agree with the argument put from both sides of the Committee. It has been endorsed by both sides, though somewhat qualified by the hon. Member for Glasgow, Pollok (Mr. George), whose support was, like the curate's egg, weak in parts. Despite that, opinion on both sides of the Committee has been practically unanimous.

I hope that on reconsideration of the case the hon. and learned Member will realise that this industry can make a significant contribution in our present difficulties. I hope that he will meet the request which is made, broadly, in both these Amendments.

Mr. W. R. Rees-Davies (Isle of Thanet)

I think it has been truly said by hon. Members during the debate that although we are somewhat sparse on the ground today, those who have spoken have spoken for very wide interests and in many cases for associations, trade unions and other organisations. I do so entirely on this occasion, and I declare an interest as President of the National Conference of Road Transport Clearing Houses. A substantial body of the members are the long-distance road hauliers of the country and many of them are also members of other road haulage associations.

I must apologise to the Committee for having been late for the beginning of the debate. We in this organisation were discussing this very matter.

Mr. Ernest Davies (Enfield, East)

On a point of order, Sir William. Would the hon. Member inform us to which Amendment he is speaking, because, so far he does not appear to be speaking to the Amendment relating to these shale oils?

Mr. Rees-Davies

I understand that, in addition to the Amendment in page 1, line 15, we are also discussing that in page 2, line 10, relating to indigenous derv oils. I was informed that we could deal not only with those oils but with derv oils generally.

The Temporary Chairman

I think that the hon. Member's remarks would come more appropriately on the later Amendment in the same page and line.

Mr. Rees-Davies

Yes, Sir William, I am very much obliged. As I said at the beginning, I apologise for not being here at the opening of the debate. I thought that the discussion covered the general position of derv oils, but I will await the Amendment which deals exclusively with them.

Dr. J. Dickson Mabon (Greenock)

Many of us are very distressed at the reply which the Economic Secretary has given. Many arguments have been advanced, but if one examines them quite closely it appears that there is an absence of a common ground of understanding as to how this industry is really to be looked upon by the Government. The hon. and learned Gentleman spoke of the comparative improvement in the preference margin, which had helped the industry and was adequate in that respect. I do not think that that is really the fact. It is true that the margin was comparatively better, but, in relation to the margin granted in 1953, which was 50 per cent. it is only 35 per cent. by the operation of this temporary increase in taxation. He also said that the introduction of a temporary Measure like this was hardly the time when one should concern oneself with the long-term development of the industry. He further argued that there was a small margin in the rise in price which would allow the industry to get some slight advantage from the actual increase.

In reply I really want to direct his attention to the development programme of the industry. This has never been referred to. In the quotation which the Economic Secretary significantly made from the statement of the Minister of Fuel and Power in relation to this matter, which was also quoted by the Financial Secretary to the Treasury, he missed out one point of consideration. I do not say that he missed it from the quotation, but he missed it from his consideration. It was stated that large-scale reorganisation would take several years to carry out. How very true—but it also takes a great deal of money to carry it out, and that can be derived only by the industry being able to have a reasonable surplus over a reasonable number of years.

As a matter of fact, the industry does not have a surplus at all. Indeed, as has been mentioned already by one hon. Member, it lost £200,000 last year. One of the major arguments in favour of the 50 per cent. preference—with which the hon. and learned Gentleman is so delighted—and one of the major reasons for granting it in 1953, was to allow the industry to spend the money, not in investment in the industry but in order to meet outstanding wage claims.

As my hon. Friend the Member for West Lothian (Mr. J. Taylor) has said, these are very patient workmen. Their reward is comparatively much less than that given to miners elsewhere, yet they still stay in the industry, and have never broken their record of industrial peace—never had a strike since 1926. When this 1953 remission was given, it was immediately swallowed up by a good company trying to do its best by its employees.

When one is arguing that this is a temporary Measure, one ought to add that even in a temporary Measure there are still certain long-term considerations, and this Amendment would fit in with those considerations. Our argument is quite straightforward. First of all, this industry has either to be announced to be finished, or, alternatively, the Government have to help it. How can the Government help it? Not by giving a subsidy but, at least, in this temporary Measure, by maintaining the existing preference of 50 per cent., which, as I say, and as has been said from the other side, has now dropped to 35 per cent. which, in terms of the economy of the company, represents an additional burden which it must carry over these four months.

The Economic Secretary was pleased to quote a Scottish proverb, but he might, at least, have addressed himself to the real virtue of Scottish economy which is inherent in that proverb, which means that one does not seek short-sighted economies but larger economies by skilful investment. The right hon. Gentleman once campaigned on the slogan "Invest in success." Here the Economic Secretary is taxing failure and claiming that, by its continued failure, the industry deserves no further help. If, as a Treasury man, he really wants to gain more money for the national economy surely the wisest thing would be to extend production. If there were a higher production from these pits the actual gross return to the Treasury would be substantially larger.

If he is thinking of "muckles" and "mickles" and the rest, he should be arguing for the development of the industry, or he should tell us, as the hon. Member for Pollok (Mr. George) said, and as many of us suspect, that this industry has, in fact, been written off, not only by British Petroleum but by the Government. If that is the case, why are not we told, rather than that we should concern ourselves with arguing this case now? We should be told, quite bluntly, that the industry is finished and that that is the whole intent and purpose of the present Administration. On the other hand, if we really want to succour the industry, this is the time, in such a temporary provision, when we should maintain the preference at 50 per cent.

I do not think that I could dignify the hon. and learned Gentleman's other points by calling them arguments. If this Amendment is, in a drafting sense, unsuitable, we can tidy it up later—

Mr. Walker-Smith

I think that it is within the recollection of the Committee that I made it clear that I did not object to the technical defects in drafting, although I thought it my duty to indicate them to the Committee.

Dr. Mabon

I am pleased to know that there is no actual objection, apart from the technical one. The Amendment could be accepted as it is at the moment, and rectified at a later stage.

That aside, surely the Economic Secretary must now make some comment on the plans for development. We, in Scotland, as reasonable people, respect reasonable argument, and we had hoped for a statement of the Government's attitude to redevelopment. If we were told that, we might be less unwilling to accept their case, but the Government must recognise that any other argument is extraneous to the whole issue, which is whether the industry is to be allowed to die, or is to he redeveloped.

I do not wish to follow the partisan arguments of the hon. Member for Pollok, who took the opportunity to accuse us of deserting our party loyalty in relation to nationalised industries, and then went on to argue for the nationalisation of the shale oil industry. I do say, however, that the hon. and learned Gentleman will have to realise that this is a national asset. Most of this industry is in Scotland—which is unfortunate. Perhaps if most of it were in Kent, or in one of the Home Counties, many hon. Members would be more concerned about the future of the industry and do all they could in its interests.

This is a national asset, which has to be saved and developed. We should not be comforted by hearing of men being employed in tearing down the industry in which they work when, in fact, that means the death knell of one of the finest industries Scotland has ever produced. This industry is a real testimony to pioneering enterprise in Scotland and it ought not to be allowed to go by default like this.

5.30 p.m.

Mr. Ross

The hon. and learned Gentleman the Economic Secretary to the Treasury described himself as a "warmhearted and simple" lawyer. To a Scotsman, I think that is a contradiction in terms. I do not think there is such a thing as a warm-hearted or a simple lawyer, but if he lays claim to those epithets, we are quite willing to put him to the test today.

The point has been well made by my hon. Friend the Member for Greenock (Dr. Dickson Mabon) on the social merits of the case, and the technical point of view has been expressed better than anyone else by the hon. Member for Pollok (Mr. George). I am sure that the hon. Member for Pollok was not moved by political considerations. He was moved by technical considerations, and what he said is worth looking at. Suppose that we had let this go by default, because it is only a temporary measure, as the Economic Secretary seemed to imply we should have done, what would the "warm-hearted and simple" lawyer have told us on the next Finance Bill?—that this cannot be judged as important by Scottish Members because when there was a Bill dealing specifically with hydrocarbon oils we did nothing about it.

What we are doing is to take advantage of an unexpected opportunity, which we would rather have done without, to raise a matter of immediate importance in Scotland. It is no secret that this matter has been raised with us, long before the Suez crisis arose, by the people in the industry, by the men and management alike. Here is the point. It is not a question of whether immediate action of this kind would lead to an immediate increase in the production of oil. Of course, it would not. It does not require a simple lawyer to tell us that.

The fact is that from the peak in 1914, when 3,500,000 tons were being pro- duced, until today we have seen a decline in the production of these indigenous oils to a figure of about 1 million tons. If the Amendment is not accepted it means that the Government are saying that the decline can continue. What they are saying is, "We are prepared to see this industry die." From the technical aspect, from the point of view of the actual availability of the oil, it will take some convincing of the people that that is wise or desirable, particularly at the present time.

I sincerely hope that the Government will have some better reasons than those which they have produced today for their proposed action. The Economic Secretary said that the Amendment would cost the Government £800,000. But he has not told us what he is already taking from the industry. At the moment I believe that he is taking about £1 million. He was at pains to point out that this £800,000 represents £6 a week for everyone in the industry. He did not tell us that he is taking about £8 a week per person in the industry in the form of tax just now.

The Government have a chance of declaring their interest in the continuation of what is historically a Scottish social and economic asset and one which, on the argument of the hon. Member for Pollok, a mining expert, is still a valuable potential asset. I am convinced that more can be obtained from this industry. Surely in the present circumstances where the cost of imported oil is bound to increase and the availability is to be subject to all the hazards of international politics in the Middle East, it is desirable to help this indigenous oil industry. I hope that our "warm-hearted and simple" lawyer, if such he be, will give us proof of his wisdom as well as of his simplicity and of the real warmth of his heart.

Mr. Willis

This has been treated by the Committee as a small issue, as indeed most Scottish matters are considered to be small. In contrast to the larger affairs of the United Kingdom they might be small, but I do not think there should be any mistake. To Scotland this is not a small matter; it is an exceedingly important matter touching a vital industry, and a matter which will possibly have very serious social consequences in the constituencies of my hon. Friends tile Members for Midlothian (Mr. Pryde) and West Lothian (Mr. J. Taylor).

I do not know what the Government think about this industry. I do not suppose the Government know themselves. They do not seem to have very clear thoughts about many things. That is why they seem to muddle from crisis to crisis, as a result of the lack of clarity about their intentions.

What do the Government intend to happen to this industry? Do they intend the industry to die? If so, they should say so. I am one of those who believe that the industry could have a future if its organisation were tackled in the correct maner. I think that the remarks of the hon. Member for Pollok (Mr. George) should be taken seriously by the Government because undoubtedly they were made by a person with considerable technical knowledge of the industry's affairs.

This industry is important to Scotland and should continue to make its valuable contribution. We have very few raw materials in this country. Why should we neglect those that we have? In spite of the fact that the Government have not made up their mind about whether the industry is to continue or not, this is a bad Bill for the industry. If the industry is to continue, obviously it must he enabled to accumulate the necessary capital for the development which will be required.

The industry will also have to be in a position to pay the workers a better wage than they are getting at present. The Bill will not help to do that. Indeed, it will prevent it. The men in this industry deserve far better treatment and a higher standard of living than they are getting. The Bill prevents them from getting those things. It prevents the fulfilment of any of the conditions which would have enabled the industry to continue.

Therefore, if the industry is to continue, this is a bad Bill. Equally, it is a bad Bill if the industry is not to continue. Certainly the Government have not assisted to any great extent in finding other employment for the workers in the industry who will be displaced if it is to close down. If it is to close down, its employees suffer hardships. I should have thought it was the duty of the Government to try to prevent those hardships and enable the workers to meet the transition period with as few hardships as possible. That could be done if the industry could obtain that degree of assistance which would help it to pay better wages and treat the employees more generously than they are being treated at present.

Even from the short-term point of view, this is a bad Bill. Why do the Government seem not to like Scotland? Why do Scottish Ministers sit dumbly on the Front Bench while Englishmen tell them what is to be the fate of Scotland? We have not had a word from a Scottish Minister. Englishmen, not Scotsmen, tell us what is to happen in Scotland. This is a preposterous situation. I am bound to say that it is one which fills me with considerable despondency.

In Scotland today we have one of the highest unemployment figures in the country. This Measure will not assist; it will tend to make matters worse. Relative to the rest of the country population is declining, and people continue to drift from Scotland; but no vigorous effort is being made to offer any assistance at all. It may be a small matter, but it is a matter to be considered in the light of the drift from Scotland and the gradual sinking of Scotland to a poorer position relative to its richer neighbour. It is greatly to be deplored.

The Government should look at the matter again. Even though it is a small crumb we ask that they should throw us, we should be quite grateful for it. Let them see whether something cannot be done to assist this industry and the men who work in it. These men should know whether they can look forward to a future in the industry or to changing their vocation very soon.

Mr. George Lawson (Motherwell)

I find myself thoroughly in agreement with all that my hon. Friend the Member for Edinburgh, East (Mr. Willis) has said. Listening to him, I thought it interesting that he, himself not a Scotsman but a man who has lived in Scotland for a long time, should almost outdo the Scotsman in his Scottishness. In this case I thoroughly endorse everything that he has said.

Because this shale industry is to all intents and purposes based upon Scotland, and because Scotland has peculiar needs which, to my mind, are not being attended to by the Government, it is important that we should reiterate the important arguments which apply here. The Economic Secretary sought to indicate that he was himself concerned with the social problems of Scotland. He sought to give the impression that there was plenty of alternative industry available and that unemployment in the shale industry was very low. One gathered from him that, if it does close down, there will be no doubt that the workers at present engaged in the industry will be able to find alternative work.

On almost any test which one can apply, Scotland is shown to be much worse off than any other region of Great Britain. I make no exception, not even of Wales. Our level of unemployment has been persistently double the level for Great Britain. The level of unemployment alone, however, is not enough as a means of gauging what is happening in the country. One must take into account also the loss of population. Scotland steadily loses her population.

I recently obtained information from the Ministry of Labour to the effect that some regions of Great Britain increased their industrial population over a period of seven years, one region in particular increasing its level by as much as 12.8 per cent. The Scottish increase, on the other hand, is 2.4 per cent. The national average works out at just under 6 per cent., which indicates that there are not the jobs available in Scotland, and Scotland steadily loses her workpeople.

The same thing will be found if one breaks down what unemployment figures there are. We find that in Scotland, for example, 50 per cent. of our unemployed are what might be called chronic unemployed, out of work for more than eight weeks. The comparable figure for London itself is about 25 per cent. and the national average is about 38 per cent. This again shows that if Scotland loses an industry or part of an industry, there is not the work in Scotland to enable the country to recuperate from the loss. The situation is much more serious there than it would be elsewhere.

Moreover, if we look at the ratio of unfilled jobs to unemployed workers, whereas, for instance, in the London area—

The Deputy-Chairman (Sir Gordon Touche)

The hon. Member is going a little wide of the Amendment.

Mr. Lawson

Sir Gordon, I should have thought that we were here discussing an industry which is to all intents and purposes being killed by Government action, and we are appealing for Government help to save it or prevent it being killed.

The Deputy-Chairman

I am quite happy so long as the hon. Member refers to this industry. It is when he refers to industry generally that I feel bound to intervene.

5.45 p.m.

Mr. Lawson

I am trying to put the matter in its proper setting. The immediate setting, of course, is that of Midlothian and West Lothian; but Midlothian and West Lothian are parts of the industrial belt of Scotland, and what happens in that part of Scotland will affect other parts. If we lose employment in the Midlothian and West Lothian areas, there is an increased pressure upon scarce jobs elsewhere. The workers can only find jobs in other parts of the area, and if the jobs are not available—as they are not in this part of the country—the result is that Scotland is so much more adversely affected than would be the case if this industry were somewhere in the Midlands or in the English eastern region.

It is very important that we should see this particular industry in its Scottish setting. I am very disappointed that the Scottish Ministers have apparently done nothing to save an industry which means so much.

I notice that the Minister seems to be very amused. As matters affect us in Scotland, as has already been said, we do not find the situation amusing. We have a very strong feeling in Scotland about what is happening here, and it is taken as an index of the interest shown in London for Scottish affairs. I do not consider myself a particularly outstanding Scottish Nationalist in any way, but this kind of thing certainly feeds that sort of feeling.

It is not merely a matter of £ s. d., as was suggested by the Minister. Perhaps his most substantial argument in replying to this debate was that if in fact we do not tax this industry, or there is a remission of the amount of tax which would be obtained if the oil came in from outside and it was all taxed on the same basis, this would mean something like £6 per worker per week. I hope I understood him aright. That sounds a very substantial argument, until it is shown to be quite false, as my hon. Friend the Member for Kilmarnock (Mr. Ross) demonstrated.

Let me put the matter in another way. It has been shown on more than one occasion by my hon. Friend the Member for Hamilton (Mr. T. Fraser) that Scottish agriculture receives a subsidy which, in effect, covers the wage bill of the industry. That has been said several times in this House and has not been refuted. I am suggesting that if the Economic Secretary's arguments amounted to anything, they would amount to this, that the only sensible way in which we can run our economy is on a basis of completely free trade, and there must be no protection at all. That is the only sensible argument to be derived from the points which he made.

We are not thinking in terms only of immediate benefit; we are thinking in terms of long-term benefit. We are looking for evidence that the Government are concerned with what is happening in Scotland and are determined to stop this decline which is going on in almost every one of the major industries of Scotland. We wish to know whether they are determined to stop it, or are not concerned about it, in which case we shall be able to present matters to the people of Scotland in their right setting.

Mr. William Hamilton (Fife, West)

I notice that the Government Front Bench are getting restless, but we make no apology for raising these Scottish questions. If my hon. Friends have looked at the Scottish Press for the last few days, they will have read that the Canadian offices in Scotland are packed with people wanting to move out of Scotland to Canada and other places. How much that is due to these proposals or to Suez, I should not like to say. It is probably due to a combination of the two.

I happen to represent a constituency bordering on an area which contains this declining industry. I have asked the Board of Trade what the Government are prepared to do for the developing mining area of Fife, but the answer from the Minister is precisely the same as the Government give to this declining area. Apparently, the Government are intent on doing nothing for an area which has a declining industry and nothing for an area which has a developing industry. What, therefore, are we to do to face the future economic problems?

I apologise to my hon. Friend the Member for Motherwell (Mr. Lawson)—I also am an Englishman representing a Scottish constituency; but that is no reason why we should not get on our feet and make the case for those we represent in Scotland. I am sick and tired of the weary indifference of the Government to the problems whether of the developing area of Fife or the declining area of the Lothians.

The Government have pursued a policy which seems to me to be a contradiction. In 1953, the preference, I understand, was at the rate of 50 per cent. It was given at that time because the industry was in a sorry plight. Today, the preference is not 50 per cent., but 35 per cent. Does the Minister claim that the industry is in a less precarious position today than in 1953? Since 1953, I understand, two mines and two crude oil works have been closed and employment is being maintained mainly because the men are employed pulling the works down.

If the Minister can defend that kind of thing at a time when we are trying to maintain our position in competitive world markets, I simply cannot understand the logic of the Government's case. I make this appeal to the Minister to look at the problem again from the wider viewpoint of the national interests of the United Kingdom and the interests of Scotland itself.

Mr. A. G. Bottomley (Rochester and Chatham)

Has the Minister nothing further to say to these very moving appeals by my hon. Friends? We understand why the Chancellor of the Exchequer cannot he present, but this is far too important a matter for the Economic Secretary to give the final answer. Would he ask his right hon. Friend the Secretary of State for Scotland, for instance, what his views are and, perhaps, before finally voting on the Amendment, as we shall do, further information might be given by the Government?

Mr. Walker-Smith

The right hon. Gentleman appreciates our constitutional doctrine of the collective responsibility of Government. I have, however imperfectly and inadequately, given the Gov-

ernment's views on the case. I assure hon. Members who have spoken subsequently to my speech that all that they have said will be taken into account when this matter comes to be considered in the context of the general review to which I referred in the closing part of my speech.

Question put, That those words be there inserted:—

The Committee divided: Ayes 208, Noes 251.

Division No. 24.] AYES [5.55 p.m.
Ainsley, J. W. Griffiths, David (Rother Valley) Moyle, A.
Allaun, Frank (Salford, E.) Griffiths, Rt. Hon. James (Llanelly) Mulley, F. W.
Allen, Arthur, (Bosworth) Grimond, J. Neal, Harold (Bolsover)
Allen, Soholefield (Crewe) Hale, Leslie Noel-Baker, Rt. Hon. P. (Derby, S.)
Anderson, Frank Hall, Rt. Hn. Clenvil (Colne Valley) Oliver, G. H.
Awbery, S. S. Hamilton, W. W. Oram, A. E.
Bacon, Miss Alice Hannan, W. Orbach, M.
Balfour, A. Harrison, J. (Nottingham, N.) Owen, W. J.
Bence, C. R. (Dunbartonshire, E.) Hastings, S. Palmer, A. M. F.
Benton, G. Hayman, F. H. Pannell, Charles (Leeds, W.)
Blackburn, F. Healey, Denis Pargiter, G. A.
Blenkinshop, A. Herbison, Mist M. Parker, J.
Blyton, W. R. Hobson, C. R. Parkin, B. T.
Boardman, H. Holman, P. Paton, John
Bottomley, Rt. Hon. A. G. Holmes, Horace Pearson, A.
Bowden, H. W. (Leicester, S. W.) Holt, A. F. Pentland, N.
Bowles, F. G. Houghton, Douglas Price, J. T. (Westhoughton)
Braddock, Mrs. Elizabeth Howell, Charles (Perry Barr) Price, Philips (Gloucestershire, W.)
Brockway, A. F. Hughes, Cledwyn (Anglesey) Probert, A. R.
Broughton, Dr. A. D. D. Hughes, Emrys (S. Ayrshire) Proctor, W. T.
Brown, Rt. Hon. George (Belper) Hughes, Hector (Aberdeen, N.) Pryde, D. J.
Brown, Thomas (Ince) Hunter, A. E. Randall, H. E.
Burke, W. A. Hynd, J. B. (Attercliffe) Rankin, John
Burton, Miss F. E. Irving, S. (Dartford) Redhead, E. C.
Butler, Herbert (Hackney, C.) Isaacs, Rt. Hon. G. A. Reeves, J.
Callaghan, L. J, Jay, Rt. Hon. D. P. T. Reid, William
Castle, Mrs. B. A. Jeger, Mrs. Lena (Holbn & St. Pncs, s.) Roberts, Albert (Normanton)
Champion, A. J. Jenkins, Roy (Stechford) Roberts, Goronwy (Caernarvon)
Chapman, W. D. Johnson, James (Rugby) Robinson, Kenneth (St. Pancras, N.)
Chetwynd, G. R. Jones, Rt. Hn. A. Creech (Wakefield) Ross, William
Clunie, J. Jones, jack (Rotherham) Royle, C.
Coldrick, W. Jones, J. Idwal (Wrexham) Shurmer, P. L. E.
Collick, P. H. (Birkenhead) Jones, T. W. (Merioneth) Silverman, Julius (Aston)
Collins, V. J.(Shoreditch & Finsbury) Kenyon, C. Silverman, Sydney (Nelson)
Corbet, Mrs. Freda Key, Rt. Hon. C. W. Simmons, C. J. (Brierley Hill)
Cove, W. C. King, Dr. H. M. Skeffington, A. M.
Craddock, George (Bradford, S.) Lawson, G. M. Slater, Mrs. H. (Stoke, N.)
Cronin, J. D. Lee, Frederick (Newton) Slater, J. (Sedgefield)
Cullen, Mrs. A. Lever, Leslie (Ardwick) Sorensen, R. W.
Darling, George (Hillsborough) Lewis, Arthur Soskice, Rt. Hon. Sir Frank
Davies, Ernest (Enfield. E.) Lipton, Lt.-Col. M. Sparks, J. A.
Davies, Harold (Leek) Steele, T.
Davies, Stephen (Merthyr) Logan, D. G. Stewart, Michael (Fulham)
Delargy, H. J. Mabon, Dr. J. Dickson Stokes, Rt. Hon. R. R. (Ipswich)
Dodds, N. N. MacColl, J. E. Stones, W. (Consett)
Donnelly, D. L. McGhee, H. G. Strachey, Rt. Hon. J.
Dugdale, Ht, Hn. John (W. Brmwch) McInnes, J. Strauss, Rt. Hon. George (Vauxhall)
Edelman, M. McKay, John (Wallsend) Stross, Dr. Barnett (Stoke-on-Trent, C.)
Edwards, Rt. Hon. John (Brighouse) McLeavy, Frank Summerskill, Rt. Hon. E.
Edwards, Rt. Hon. Ness (Caerphilly) MacMillan, M. K. (Western Isles) Sylvester, G. O.
Edwards, Robert (Bilston) MacPherson, Malcolm (Stirling) Taylor, Bernard (Mansfield)
Edwards, W. J. (Stepney) Mahon, Simon Taylor, John (West Lothian)
Evans, Albert (Islington, S. W.) Mainwaring, W. H. Thomas, George (Cardiff)
Fernyhough, E. Mallalieu, E. L. (Brigg) Thomas, lorwerth (Rhondda, W.)
Flenburgh, W. Mann, Mrs. Jean Thomson, George (Dundee, E.)
Finch, H. J. Marquand, Rt. Hon. H. A. Timmons, J.
Fletcher, Eric Mason, Roy Tomney, F.
Forman, J. C. Mayhew, C. P. viant, S. P.
Fraser, Thomas (Hamilton) Messer, Sir F. Wade, D. W.
Gaitskell, Rt. Hon. H. T. N. Mitchison, G. R. Warbey, W. N.
Gibson, C. W. Monslow, W. Watkins, T. E.
Cordon Walker, Rt. Hon. P. C. Moody, A. S. Weitzman, D.
Greenwood, Anthony Morris, Percy (Swansea, W.) Wells, Percy (Faversham)
Grey, C. F. Moss, R. West, D. G.
Wheeldon, W. E. Williams, Rt. Hon. T. (Don Valley) Yates, V. (Ladywood)
White, Henry (Derbyshire, N. E.) Williams, W. R. (Openshaw) Younger, Rt. Hon. K.
Wigg, George Williams, W. T. (Barons Court) Zillacus, K.
Wilkins, W. A. Willis, Eustace (Edinburgh, E.)
Williams, David (Neath) Wilson, Rt. Hon. Harold (Huyton) TELLERS FOR THE AYES:
Williams, Rev. Llywelyn (Ab'tilllery) Winterbottom, Richard Mr. Short and Mr. Deer.
Williams, Ronald (Wigan) Woof, R. E.
NOES
Agnew, Cmdr. P. G. Glover, D. Mackie, J. H. (Galloway)
Aitken, W. T. Godber, J. B. Maclean, Fitzroy (Lancaster)
Allan, R. A. (Paddington, S.) Gomme-Duncan, Col. Sir Alan McLean, Neil (Inverness)
Alport, C. J. M. Gower, H. R. MacLeod, John (Ross & Cromarty)
Amery, Julian (Preston, N.) Grant-Ferris, Wg Cdr. R. (Nantwich) Macmillan, Maurice (Halifax)
Amory, Rt. Hn. Heathcoat (Tiverton) Green, A. Macpherson, Niall (Dumfries)
Arbuthnot, John Gresham Cooke, R. Maddan, Martin
Armstrong, C. W. Grimston, Sir Robert (Westbury) Maitland, Cdr. J. F. W. (Horncastle)
Ashton, H. Grosvenor, Lt.-Col. R. G. Maitland, Hon. Patrick (Lanark)
Astor, Hon. J. J. Gurden, Harold Manningham-Buller, Rt. Hn. Sir R.
Atkins, H. E. Hall, John (Wycombe) Marlowe, A. A. H.
Baldwin, A. E. Harris, Frederic (Croydon, N. W.) Marshall, Douglas
Balniel, Lord Harris, Reader (Heston) Maude, Angus
Barber, Anthony Harrison, A. B. C. (Maldon) Maudling, Rt. Hon. R.
Barlow, Sir John Harrison, Col. J. H. (Eye) Maydon, Lt.-Comdr. S. L. C.
Baxter, Sir Beverley Harvey, Ian (Harrow, E.) Molson, Rt. Hon. Hugh
Beamish, Maj. Tufton Harvey, John (Walthamstow, E.) Morrison, John (Salisbury)
Bell, Philip (Bolton, E.) Harvie-Watt, Sir George Mott-Radclyffe, C. E.
Bell, Ronald (Bucks, S.) Heath, Rt. Hon. E. R. G. Nabarro, G. D. N.
Bennett, F. M. (Torquay) Henderson, John (Cathcart) Nairn, D. L. S.
Bevins, J. R. (Toxteth) Hesketh, R. F. Neave, Airey
Birch, Rt. Hon. Nigel Hicks-Beach, Maj. W. W. Nicholls, Harmar
Body, R. F. Hill, Rt. Hon. Charles (Luton) Nicholson, Godfrey (Farnham)
Bossom, Sir Alfred Hill, Mrs. E. (Wythenshawe) Nicolson, N. (B'n'm'th, E. & Chr'ch)
Boyd-Carpenter, Rt. Hon. J. A. Hinchingbrooke, Viscount Nugent, G. R. H.
Boyle, Sir Edward Hirst, Geoffrey Oakshott, H. D.
Braithwaite, Sir Albert (Harrow, W.) Holland-Martin, C. J. O'Neill, Hn. Phelim (Co. Antrim, N.)
Brooke, Rt. Hon. Henry Hornby, R. P. Ormsby-Gore, Hon. W. D.
Browne, J. Nixon (Craigton) Howard, Hon. Greville (St. Ives) Orr, Capt. L. P. S.
Buchan-Hepburn, Rt. Hon. P. G. J. Howard, John (Test) Orr-Ewing, Charles Ian (Hendon, N.)
Bullus, Wing Commander E. E. Hughes Hallett, Vice-Admiral J. Orr-Ewing, Sir Ian (Weston-S-Mare)
Burden, F. F. A. Hughes-Young, M. H. C. Osborne, C.
Butcher, Sir Herbert Hutchison, Sir Ian Clark (E'b'gh, W.) Page, R. G.
Butler, Rt. Hn. R. A. (Saffron Walden) Hyde, Montgomery Pannell, N. A. (Kirkdale)
Campbell, Sir David Hylton-Foster, Sir H. B. H. Partridge, E.
Carr, Robert Iremonger, T. L. Peyton, J. W. W.
Cary, Sir Robert Irvine, Bryant Godman (Rye) Pickthorn, K. W. M.
Channon, H. Jenkins, Robert (Dulwich) Pilkington, Capt. R. A.
Chichester-Clark, R. Jennings, J. C. (Burton) Pott, H. p.
Clarke, Brig. Terence (Portsmth, W.) Jennings, Sir Roland (Hallam) Powell, J. Enoch
Conant, Maj. Sir Roger Johnson, Dr. Donald (Carlisle) Price, David (Eastleigh)
Cooper, A. E. Johnson, Eric (Blackley) Prior-Palmer Brig. O. L.
Cooper-Key, E. M. Jones, Rt. Hon. Aubrey (Hall Green) Raikes, Sir Victor
Cordeaux, Lt.-Col. J. K. Joseph, Sir Keith Ramsden, J. E.
Corfield, Capt. F. V. Johnson-Hicks, Hon. Sir Lancelot
Craddock, Beresford (Spelthorne) Keegan, D. Rawlinson, Peter
Crouch, R. F. Kerby, Capt. H. B. Redmayne, M.
Cunningham, Knox Kerr, H. W. Rees-Davies, W. R.
Currie, G. B. H. Kershaw, J. A. Remnant, Hon. P.
Davidson, Viscountess Kimball, M. Renton, D. L. M.
D'Avigdor-Goldsmid, Sir Henry Ridsdale, J. E.
Deedes, W. F. Lagden, G. W. Rippon, A. G. F.
Digby, Simon Wingfield Lambert, Hon. G. Robinson, Sir Roland (Blackpool, S.)
Donaldson, Cmdr. C. E. McA. Lambton, Viscount Rogers, John (Sevenoaks)
Doughty, C. J. A. Lancaster, Col. C. G. Roper, Sir Harold
Drayson, G. B. Leavey, J. A. Ropner, Col. Sir Leonard
du Cann, E. D. L. Leburn, W. G. Russell, R. S.
Dugdale, Rt. Hn. Sir T. (Richmond) Legge-Bourke, Maj. E. A. H. Sandys, Rt. Hon. D.
Duncan, Capt. J. A. L. Legh, Hon. Peter (Petersfield) Schofield, Lt.-Col. W.
Duthie, W. S. Lindsay, Hon. James (Devon, N.) Scott-Miller, Cmdr. R.
Eccles, Rt. Hon. Sir David Lindsay, Martin (Solihull) Sharples, R. C.
Eden, J. B. (Bournemouth, West) Linstead, Sir H. N. Shepherd, William
Emmet, Hon. Mrs. Evelyn Llewellyn, D. T. Simon, J.E.S. (Middlesbrough, W.)
Errington, Sir Eric Lloyd, Maj. Sir Guy (Renfrew, E.) Smithers, Peter (Winchester)
Farey-Jones, F. W. Lloyd-George, Maj. Rt. Hon. G. Soames, Capt. C.
Fell, A. Longden, Gilbert Spearman, Sir Alexander
Finlay, Graeme Low, Rt. Hon. A. R. W. Speir, R. M.
Fisher, Nigel Lucas, Sir Jocelyn (Portsmouth, S.) Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Fraser, Hon. Hugh (Stone) Lucas, P. B. (Brentford & Chiswick) Stanley, Capt. Hon. Richard
Freeth, D. K. Lucas-Tooth, Sir Hugh Stevens, Geoffrey
Galbraith, Hon. T. G. D. McAdden, S. J. Steward, Harold (Stockport, S.)
Garner-Evans, E. H. McCallum, Major Sir Duncan Stewart, Henderson (Fife, E.)
George, J. C. (Pollok) Macdonald, Sir Peter Stoddart-Scott, Col. M.
Gibson-Watt, D. McKibbin, A. J. Storey, S.
Studholme, Sir Henry Turner, H. F. L. Ward, Dame Irene (Tynemouth)
Sumner, W. D. M. (Orpington) Turton, Rt. Hon. R. H. Waterhouse, Capt. Rt. Hon. C.
Taylor, William (Bradford, N.) Vane, W. M. F. Watkinson, Rt. Hon. Harold
Teeling, W. Vaughan-Morgan, J. K. Webbe, Sir H.
Temple, J. M. Vickers, Miss J. H. Whitelaw, W. S. I. (Penrith & Border)
Thomas, Leslie (Canterbury) Vosper, D. F. Williams, Paul (Sunderland, S.)
Thompson, Kenneth (Walton) Wakefield, Edward (Derbyshire, W.) Williams, R. Dudley (Exeter)
Thompson, Lt.-Cdr. R. (Croydon, S.) Wakefield, Sir Wavell (St. M'lebone) Wilson, Geoffrey (Truro)
Thorneycroft, Rt. Hon. P. Walker-Smith, D. C. Wood, Hon. R.
Tiley, A. (Bradford, W.) Wall, Major Patrick
Tilney, John (Wavertree) Ward, Hon. George (Worcester) TELLERS FOR THE NOES:
Mr. Wills and Mr. Bryan.
Mr. Bottomley

I beg to move, in page 2, line 10, at the end to add: (2) Nothing in this section shall apply to road vehicle fuel oil known as "Derv.

The Deputy-Chairman

I think it would be convenient to take with this Amendment that which follows it in the name of the right hon. Member for Smethwick (Mr. Gordon Walker), in page 2, line 10, at the end to add: (2) This section shall not have effect in relation to hydrocarbon oils purchased for the purpose of and intended to be used for the carriage of goods by road in a goods vehicle as defined in subsection (2) of section one of the Road and Rail Traffic Act, 1933: Provided that hydrocarbon oils shall not be deemed to be purchased for such purpose unless they are purchased by or on the written authority of the holder of an A, B or C licence within the meaning of section two of the said Act and unless on the occasion of each such purchase the purchaser completes and signs a form and a duplicate thereof which shall be handed to him by the seller stating in which vehicle, identifying it, it is intended that such hydrocarbon oils are to be used.

Mr. Bottomley

I am sure we agree that it is convenient, Sir Gordon, to take the two Amendments together.

I took note of what the Economic Secretary said, which was that this tax had been imposed to meet the economic difficulties arising from the Suez troubles. We on this side of the Committee have already said that this is really an autumn Budget. If the Chancellor had looked for a way in which he could harm industry he could not for that purpose have chosen a tax other than this one which is being imposed on petrol and its imposition on derv is particularly harmful.

It is especially unfortunate that it should be imposed at this moment when our trade returns are so good. I am assured by those concerned with industry that we are competing on such narrow margins now that any additional cost to industry will cause problems for industry, and to push up the price of petrol and derv will do just that. British Road Services and private operators of long-dis- tance haulage have already applied for a 7½ per cent. surcharge on all general haulage of parcels and on tank haulage.

The Financial Secretary will be familiar with the arguments that we have used on other occasions to secure a reduction of this tax, and I do not want to go all over what has been said on those other occasions, because I am sure that the right hon. Gentleman is well briefed, if not by his officials, from his own experience and knowledge gained from taking part in so many of these debates. I thought I would try to produce some new facts and I have been finding out the experiences of my constituents. Other hon. Members must have been supplied with similar information.

The Committee will remember that my district was once dependent upon the naval dockyard and Messrs. Short Brothers' aircraft industry there. Short Brothers went. We have diversified industry there now, and most of it is designed to make the economy of the country more prosperous. Industrialists in my district say that as a result of this additional tax the electronics industry in my area, an industry making supplies vital for defence, and which has gone into the dollar market against keen competition, will have to carry additional transport costs, which, as I have said, will make all the difference between getting those dollar orders and losing them.

There is a factory which makes oil pumps and refining equipment, which is vital equipment, particularly now that a good deal of damage has been done to that sort of equipment. That factory sends most of its oil-refining equipment and pumps to dollar areas. That machinery has to be transported between the factory and the docks. This additional tax will add to the overhead costs. I could go on giving such illustrations of how this tax will affect the production of things required in vital export industries, for aircraft, machine tools. Heavy earth-moving equipment is made in my district. That industry is now making great inroads in markets which, previously, only the Americans controlled. I am assured by all those industrialists that we shall lose trade as a result of the additional costs arising from this tax.

There is for dealing with industry a county advisory committee which is responsible to the South-Eastern Regional Board for Industry. So seriously does it take the effects likely to arise from this increased petrol tax that it is asking the Board to consider the matter urgently. That body knows, as do hon. Members of this Committee, as certainly do those connected with industry, that road haulage is the handmaiden of industry.

The tax is far too heavy, and the additional 1s. ought not to be imposed, we feel, if we are to meet the competition from our trade rivals. We are at a disadvantage with our nearest competitors in Western Europe. Their derv tax, in every country, is less than the petrol tax here, so industry in Western Europe has an advantage over industry in this country.

The Chancellor has said that this oil is precious, but I do not know why he has made it bear proportionately a higher tax than mink coats or diamond bracelets. It is precious not in that sense, but in the sense I have indicated—because of its use in industry and especially exporting industry. If we are to help industry, the tax ought not to be put on derv.

The tax has its effects also upon passenger vehicle services, and they, in turn, have their effects on industry and other services. More than 75 per cent. of the public service vehicles now use derv. The Financial Secretary once used an argument which he may employ again, that it was difficult to make a distinction between derv and petrol because it might emphasise the advantage of vehicle owners who took to using derv instead of petrol.

I am sure that the Financial Secretary has in mind the argument that it may have a long-term effect on the revenue, but, since this is a short-term tax, it should be easy on this occasion to forgo it. By doing so, the Financial Secretary would help to fight inflation. The right hon. Gentleman has said that abuses are likely, but if he made more use of his own Department he could prevent those arising. I am thinking of his own excellent Customs and Excise officers who are competent to handle this matter.

I notice the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation sitting on the Government Front Bench. I am equally sorry that the Financial Secretary did not suggest to his right hon. Friend that Customs and Excise could have enforced rationing more easily and effectively than it is being done at the moment. If I may digress for a moment, in that connection I am very much concerned with avoiding road accidents arising from L-drivers being on the road by themselves.

An additional reason for not imposing this tax concerns the wellbeing and economy of the country. I admit that it is not a heavy burden in view of the over-all position, but I would remind the Financial Secretary that each time we have pointed out the heavy burdens on the economy the retort has been that only one-fifth or a quarter, or even less than that, is being added to the cost of living index figure. Yet these small increases cause in the aggregate a great deal of trouble for those concerned with the fight against inflation.

I say that this is a further burden. The increase in fares, the increase in road haulage charges which must follow will, in turn, bring new wage demands. In our view, the Financial Secretary would be well advised, in the case of derv and those vehicles associated with the second Amendment, to agree that the tax should not be imposed in their case.

The Deputy-Chairman

I understand that it will be for the convenience of the Committee to call the second Amendment for a Division only.

Mr. Rees-Davies

I should like the Committee to bear with me for a few moments while we consider the impact of this tax in present circumstances upon the position of the long-distance road haulier. Earlier in the debate it was pointed out that, although relatively few hon. Members were speaking, they were doing so on behalf of a wide range of interests on various aspects of this industry and of the fuel industry.

I want to put the case as President of the Conference of Road Transport Clearing Houses and as a matter of temporary expediency. I agree entirely with the arguments put forward by my hon. and learned Friend the Economic Secretary to the Treasury in the preceding debate, when he referred to the fact that many of the arguments about indigenous derv were arguments which really arose on what might be called the annual Budget debate, but I hope that we shall not have those arguments addressed to this Amendment.

It seems to me irrelevant, under these circumstances, to discuss whether or not there should be an extra 1s. tax on derv from the point of view of the national income on a permanent basis. I say that because this Bill is an entirely temporary Measure, brought forward as a temporary expedient, purely for the period during which petrol rationing will continue, or a shorter period, or a period not to exceed it by a long time.

The long-distance road hauliers of the country are deeply anxious about the effects of petrol rationing. All engaged in the industry—the men who drive under the A and B licences, living entirely by fuel and nothing else—are anxious that their position shall be understood by the Government, so that there is a clear distinction between their position under the A and B licences and that of the C licence holders who do not live by fuel alone but who carry on their various trades and businesses.

These are the facts. About 80 per cent. of all the A and B licence holders, as members of the Conference and of the Road Haulage Association, are users entirely of diesel fuel, and, therefore, to a large extent they are users of derv. I want to give the Committee figures of one trading concern, Heymans Ltd., who have 27 vehicles, all of which use derv. Their monthly consumption is 11,935 gallons. Therefore, if there is to be this increase in tax they will have to carry a further burden of £600 a month. Under the basic provisions for rationing—because all this argument is tied up with rationing—they now get 331 gallons weekly, so that their total basic is 5,296 gallons, which represents about 14 days' supply—14 days' supply over a period of six weeks.

Whether they could stand the burden of this additional tax or not depends also, of course, on the attitude adopted by other Ministries. This is not solely a Treasury matter, because what is directly affected is the attitude of the Minister of Fuel and Power and, more particularly so, that of the Minister of Transport and Civil Aviation. All three Ministries must be most closely associated in the very difficult manoeuvre which now lies ahead.

6.15 p.m.

It seems to me that there is only one thing which can save the road haulage industry from ending in Carey Street in the next six months, at any rate the private road hauliers, who are not buttressed by any of the State subsidies enjoyed by the B.T.C. [An HON. MEMBER: "No subsidy."] Well, that is convenient, if somewhat loose terminology, to express the fact that B.T.C. is backed by the capital of the State whereas the private road haulier is not. The vital fact is that unless the road hauliers can get approximately 80 per cent. of their normal petrol requirements, anything less will mean that they will immediately be facing a severe loss.

The basic petrol ration is in no way related to the quantity of petrol consumed by the haulage industry. That is clearly shown by the illustration which I have just given to the Committee, because if the basic allowance which is given as a basic for four months will, in fact, last for only 14 days it will be seen that it in no way enables the business to continue. If these people are to suffer a heavy loss it becomes very important to look at the additional duty—and in this case the duty concerned is not on petrol, but on derv—because some of their losses can be cushioned in this temporary emergency by not having to pay an increased tax.

If Heymans had £7,200 a year less to pay in respect of derv than they would otherwise have to pay, that would be some cushion against the loss which they are bound to sustain by the cuts in their services inevitably resulting from the petrol cut. It seem to me, therefore, that this issue is tied up with the instructions which are to be given by the Ministry of Transport in conjunction with the Ministry of Fuel and Power. I therefore urge those Ministries and the Treasury to discuss these matters together and, first, make quite sure that by the week-end, before petrol rationing comes into force, the whole position is clearly known. It is vital that the men in the industry should know by the week-end exactly what the supplementary position will be in respect of rationing. If they do not know that position they do not know what will be the financial effect on their business.

This is the really vital matter. In considering that it seems essential that supplementary rations must be based on a percentage—whatever the Government decide that percentage must be—of their normal requirements, which they can prove. To relate it to the basic would be absolutely fatal. These are the matters which I have been discussing with the industry this afternoon, and these are the suggestions which these men make.

If the Minister of Transport and the Minister of Fuel and Power find that the cuts which they have to make are severe, it is essential that they should bring their own representations to bear upon the Treasury to ensure that there is this differential tax in the case of derv—because it would be a differential that would then arise.

To sum up, the Amendment, asking that derv shall not attract an additional tax, is obviously of the greatest value in the present circumstances of the emergency to all the road transport industry, both B.T.C. and the long-distance road hauliers. It is obviously of the greatest benefit to those in the long-distance road haulage business. These people live by fuel alone and, therefore, they would be assisted if they did not have to pay this additional tax.

I would not support this argument for one moment in ordinary circumstances. If this were not a case of a short temporary emergency I should not support the Amendment. I only take the view that the Amendment is right if there has to be a substantial fuel cut, because if there must be a substantial fuel cut on these people whose livelihood depends on fuel it seems rather hard on them that they have to carry the burden both ways.

If, on the one hand, the Ministry of Transport and the Ministry of Fuel and Power say, "We do not intend that there should be more than a 20 per cent. cut in your normal requirements," I believe that the industry can get by and pay the fuel tax. If, on the other hand, the Minister of Fuel and Power and the Minister of Transport, in their wisdom, come to the conclusion that there is simply not enough derv to enable at least 80 per cent. of requirements to be met, the Treasury ought to say, in those circumstances, "We must, having regard to the emergency, try to save this industry from a very unfair and very severe financial loss, and one way in which we can do that is not to impose the tax."

All this seems a somewhat complicated argument, but that is inevitable when one is arguing on one Amendment and yet one has to consider the policy of three different Ministries. I have tried to explain how it is that these men are deeply concerned that they shall know their future clearly within the next 72 hours and shall know exactly what percentage of their normal quantity of derv consumed they will be able to have, at least over the next month.

If that were known and it were in excess of 80 per cent. of their normal use, it would not be necessary to support the Amendment, but if it is to be below that figure I urge the Government to give most careful consideration to any measures that will ensure that these men, who in many cases have only recently invested capital in this business as a result of the active and right policy of Her Majesty's Government through their 1953 legislation, shall have the Government's support and shall be given some hope that they will not have to carry this additional burden as well.

Mr. Frank McLeavy (Bradford, East)

I fear that if I follow the hon. Member for the Isle of Thanet (Mr. Rees-Davies) in discussing the rationing of petrol or derv for the industry, I shall, very properly, be ruled out of order. But whatever may be the position of rationing, we on this side of the Committee sincerely hope that the road hauliers and the passenger transport industry will receive rations as large as it is possible for the Government to provide in the existing circumstances.

I am sure that the hon. Member for the Isle of Thanet is aware of the statements made from the Government Front Bench that it will be the policy of the Ministry of Transport and Civil Aviation to force as much traffic on to the railways during this period as they possibly can. I understand that the Ministry's policy at present is that the transportation of coal shall be by rail if there are sufficient facilities available. Therefore, I think that we can assume that the position of the road haulier side of the industry will be very difficult during this emergency period.

I want to refer to the original duty of 2s. 6d. a gallon on derv. The protest made by the transport industry against the imposition and continuance of this tax has been very strong. I am sure that the hon. Member for the Isle of Thanet will agree that it is within the range of possibilities that the road haulier side of the industry would have been making, in a very short time, the strongest possible representations for the reduction of this penal tax. British Road Services has already decided to increase its charge upon the invoices for general haulage by 7½ per cent., and the Road Haulage Association has decided to make it 10 per cent. It is quite evident that these two charges alone will represent an increased cost upon exports and upon commodities that we require in the home market.

I have argued in the House for several years this question of the tax on derv and petrol as far as it affects road hauliers and passenger transport services. I could never understand why it was thought necessary to impose upon the industrial life of the nation a tax which inevitably reflects itself in increased costs of production. It seemed to me that when we were fighting, as we have never fought before, to maintain and to increase our export trade, that was a time not further to increase the tax, however temporary the increase may be, but a time to take off some part of the tax, thus giving industry a chance to serve the community better than it has served the community in the past.

6.30 p.m.

All the time we have argued this matter in the House the Minister of Transport and the Government have refused to accept the views which have been put forward on behalf of the industry. The Chancellor of the Exchequer talked about the extra duty representing one-third of one point rise in the cost-of-living index. I do not believe that anybody accepts that. The road hauliers and every other section of transport will pass this 7½ per cent. and 10 per cent. increase on to the costs of production. By the time the various people affected by this rise have added a little for luck—and that is what many will do—we shall find that this temporary duty does more harm than good to the well-being of the country.

It is no good the Government talking to the trade union movement about wanting to maintain the wages structure and wanting to resist reasonable applications for wage increases; and it is no good their going to the Trades Union Congress and arguing that in the nation's interest the trade unions must set an example of leadership, when the Government themselves on every conceivable occasion are increasing the cost of living for every section of communal life.

I believe I am expressing the view of the trade union movement when I say that the trade unions are prepared to do everything they can, and have been so prepared for many years, to help the nation out of any financial crisis. We know that it is not a question of saving the Government. It is a question of saving the nation. On the other hand, we expect that if the Government require our assistance and our co-operation, they will themselves set an example. It is no good their increasing rents or the price of bread or the general cost of living if they are seriously to ask the trade union movement to co-operate with them in overcoming the crisis. I do not think that the Government have for one moment given serious thought to the matter.

I stand to be corrected by the Financial Secretary, if he can correct me, but I understand that the consumption of derv by transport is about one-sixth of the total consumption and that the other five-sixths is used in industry, in the main free of duty. It seems to me that if the Government feel that they must have this £30 million which they have lost on their revenue estimates for this financial year, there are better ways of getting the money.

I have suggested recently in the House that they would serve the greater interests of the nation if they waived the £30 million altogether, but if they felt that they must make up the loss of revenue received from duty on derv, an easier way was open to them; they could surely have said to the industries which have for so long enjoyed exemption from this duty, "The nation is in a state of emergency; we will ask those of you who use five-sixths of the total consumption of fuel oil to bear a temporarily increased duty." In my opinion, such a duty would not have amounted to more than 3d. a gallon. Had they done that, the duty would have been borne by industry with no trouble at all and we should have been saved all the humbug and nonsense about increasing fares and increasing road haulage rates.

It seems to me that whenever the Government get into a financial difficulty they always make the wrong decision at the wrong time. They do not seem to realise that when this charge is imposed, commodities will be increased in price; and, when the emergency ends, the taxpayer will still have to pay those higher prices in the shops. The Financial Secretary knows very well that although he may get the Road Haulage Association to withdraw its increase of 10 per cent. and British Transport Road Services to withdraw their increase of 7½ per cent., when the emergency is over, he will not bring the prices down in the shops—prices which he will have deliberately pushed up by this act of stupidity.

I say frankly to the Financial Secretary and to the Parliamentary Secretary to the Ministry of Transport and Civil Aviation that this is not good enough for the transport industry, which is one of the nation's most vital industries. It is an industry upon which our prosperity depends. To play about with it as if it were a political toy means that the Government are not prepared to face the realities of the situation. This industry cannot afford to bear the present duty, never mind an extra duty of 1s. imposed for however long a period we regard as "temporary".

I say, in all seriousness, that unless the Treasury is prepared to accept the sounder advice of people in the industry, and not the advice which it is receiving from officials who appear to know very little about this matter, we shall be in a difficult position. The sooner the Treasury accepts the advice of people in the industry the better for the community.

In examining the question of the 1s. increase in duty, the Government should have taken both sides of industry into their confidence and into consultation. They should have examined the possibilities of passing this £30 million extra, if it must be collected, on to broader shoulders than those of the road transport industry. I do not want to impinge on the next Amendment about road transport, on which I hope to say a few words, but I must say that this is the wrong way to deal with a vital national service. It is no good hon. Members saying that if we get a reasonable volume of traffic transport will be able to carry the extra 1s. There will not be a reasonable volume of traffic. The private sector as well as the public sector of road transport will have a very lean time for some months ahead.

We have to approach this matter remembering the financial difficulties which increased taxation will impose on the transport industry and the unemployment that it may cause. Private owners, for whom hon. Members opposite fought so hard when we were discussing the denationalisation of road transport, will find it almost impossible to keep in business. The duty of the Government is at least to try to order their taxation so that it is fair and equitable to every section of the community.

The tax of 2s. 6d. per gallon cannot be defended and neither can the extra 1s. It is an imposition on the transport industry which will be reflected in the nation's prosperity. The time is coming when it will be realised what this extra 1s. means. The people who were so anxious to have the industry denationalised will find that they have been given a raw deal.

The Financial Secretary to the Treasury (Mr. Henry Brooke)

I do not seek for one moment to minimise the difficulties which will be experienced by all users of oil during the time of shortage until the Suez Canal is opened again, the pipelines mended and the oil flowing freely across the continents and the oceans. We are in some danger, on these two specific Amendments, of reverting to a debate on the whole principle of the Bill. That is what has prompted me to rise now. It might help the Committee if I define the effects of these two Amendments so that as far as possible we can concentrate our attention on them.

The first Amendment seeks to exempt derv from the additional tax. The main beneficiaries of that Amendment, and I doubt that whether this point has yet become clear in the debate, would be road passenger transport operators. There would be relatively smaller benefit to goods transport operators. I am sure that the Committee realises that a very large number of goods lorries are still petrol-driven and would gain nothing and, indeed, would be discriminated against if the first Amendment were accepted. The Amendment will, of course, benefit some taxis, because a switchover from petrol to diesel-engined taxis is taking place.

Mr. McLeavy

If the Amendment falls short of what the Treasury wants, will the right hon. Gentleman amend it to include petrol?

Mr. Brooke

I thought that it was the duty of a Minister replying to a debate about Amendments to deal with the Amendments as they stood, and not with other Amendments which might come later on the Notice Paper. With permission, and, I hope, with approval, I will first direct my remarks to the first Amendment, and then deal with the second.

As I said, the first Amendment would mainly benefit road passenger transport operators, and to some extent, goods transport operators, some taxis, some pleasure party and excursion coaches and a few cars—there is a minority of diesel-engined cars on the road. It would give the diesel engine an overwhelming economic advantage if there were suddenly to be a differentiation of 1s. in the tax. I am sure that it is realised by the hon. Member for Bradford, East (Mr. McLeavy) that the duty is imposed on derv and such oils as a protection for the petrol duty. That is why it is on these other road fuels and not on boiler fuels used in industry.

6.45 p.m.

The diesel engine is already more efficient mechanically in terms of miles per gallon and the Amendment would give it a very substantial tax preference for the period during which the Bill is in operation. During the Second Reading debate, hon. Members on both sides were expressing some suspicious doubts about whether the word "temporary" really meant "temporary". Ministers were asked to defend the Bill against the charge that it would go on for ever. Clearly, the longer the Bill was in operation, the greater the incentive it would create to a switch-over, if possible, from petrol to derv.

Mr. G. A. Pargiter (Southall)

Why not?

Mr. Brooke

I will say why.

There is no doubt that if a differentiation in the tax were granted temporarily under the Bill, so as to preserve the position of the derv users against any extra impost, a potent claim would be established for the difference to be made permanent. Indeed, I am sure that the hon. Member for Bradford, East has supported, if not actually moved, Amendments to that end in the past. It would be impossible to hold a permanent tax differentiation between petrol and derv, without a serious loss of revenue over the years. There would clearly be a rapid change-over from petrol to diesel engines, and if one were to try to minimise that one would have to lower the tax on petrol and the Exchequer would thus lose both ways.

There is more to it than that. When I said that the Amendment would stimulate a change-over, hon. Members asked me why it should not do so. To give an artificial preference of this kind to derv would run counter to a wise fuel policy for this country, because, as I am advised, we will find the pressure of demand on supply pressing more and more sharply in the case of derv than in the case of petrol. We should certainly be unwise to accelerate by artificial means a more rapid increase in the use of diesel-engined vehicles. It would increase the drain on this type of oil which is already, and seems likely to be, even when the immediate cause of difficulty is over, in the shortest supply.

I have also to consider the cost involved in the Amendment. It would be £6½ million in this financial year out of the £30 million which the additional duty is designed to raise, so that the acceptance of the Amendment would cut away one-fifth of the additional taxation. In a full year the amount would be about £20 million. Those are very substantial arguments against altering the policy which the House, under Governments of different political colours has pursued hitherto—of keeping the tax on derv in line with that on petrol.

The other Amendment would give a tax preference to petrol and derv used in goods vehicles. The first point I would make on that is that despite all the kind things said about the ability of our civil servants, it would really be impracticable. Both petrol and derv are charged on delivery from the bonded bulk storage depots of the oil companies, and at that stage it is quite impossible to say with precision into what type of vehicle any oil is going. All the stocks held by retail distributors are duty paid, and the colossal task would, therefore, be imposed on those who would have to administer the duty, and all who handle the oil, of making a differentiation acording to the eventual form of consumption at the point where the oil leaves the storage depots.

This would necessitate administrative arrangements which would be intolerably complicated and would involve large staff increases not only for those administering the duty but for all those who are handling the oil, both on the Government and, probably, on the commercial side. Hon. Members will very quickly see the risk of abuse which that would open up.

The cost of the Amendment exempting goods vehicles would be £11 million in this financial year, or £35 million in a full year. If it were accepted we should be losing not one-fifth but over one-third of the additional revenue upon which the Chancellor is counting. That is not all. If hon. Members will pause to think it out, they will very quickly realise that we could hardly grant this exemption from the additional tax for goods vehicles only and do nothing at all for road passenger transport. I can see no argument for a differentiation of this kind which could possibly commend to the general public, to whom we are responsible. If, by accepting the second Amendment, we have to extend this exemption from goods vehicles to passenger vehicles, even more of the revenue would disappear.

I listened with great interest to the very sincere speech of my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies). My hon. Friend the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation was here when my hon. Friend was speaking, and he took a note of what he said. I will see that his remarks are conveyed to my right hon. Friend the Minister of Fuel and Power, because my hon. Friend indicated that much of what he had to say he wished to be observed not simply by the Treasury but by those in charge of other Departments. I can assure him that I recognise to the full, as do all members of the Government, the special position of those who live by goods transport, as distinct from those who carry their goods in their own vehicles, or use vehicles on the roads for pleasure or for half pleasure and half business purposes. There are some who, as he says, count on goods transport operation for their revenue.

I do not seek to minimise the difficulties that will be caused throughout the transport industry by the temporary shortage of oil. There is a later Amendment upon which we call discuss how long this extra tax should continue to be imposed. All I will say now is that we all hope that the cause of it will disappear at the earliest date. The Government are engaged in carrying through Parliament this Bill, which is part of the country's defences against the economic situation which inevitably presses upon us. That situation sprang from Nasser's original seizure of the Canal, which endangered our oil supplies. I, too, am now being tempted to talk of wider issues. I hope that I have served the Committee by defining more closely the effect and consequences of the two Amendments, and I must advise the Committee to reject them both.

Mr. John Cronin (Loughborough)

I rise to support the first of the two Amendments. I feared that our attempt to amend the Bill in this way was rather optimistic. I saw the Financial Secretary arrive, with his face set in rather hard lines. It was quite clear that he intended to kill the Amendment. The Committee will no doubt recollect that the Financial Secretary is the survivor of an original triumvirate which was of some standing some time ago. His continued presence there is a monument erected to the memory of a multitude of dead Amendments.

I found some of the right hon. Gentleman's arguments a little difficult to follow. One of them seemed to have a particularly sinister ring, in view of the context of the Bill. He said that if this concession were made to users of derv there would be a serious loss of revenue over the years. We understand that this is supposed to be a temporary Measure, to operate for a few months. Does he really mean "over the years", or is his right hon. Friend misleading us? Is it really the purpose of the Treasury to impose this frightful burden upon the road haulage industry for a period of years?

Mr. H. Brooke

Perhaps the hon. Member did not follow that part of my argument. I was saying that if we established now, for this temporary period, a differentiation between the tax on petrol and the tax on derv, potent claims would then be made that when the Measure lapsed that differentiation should still be preserved. That is something which Governments of both political colours have stood out against hitherto. I was pointing out the fact that if that claim was strengthened and admitted as a result of any temporary action which we took now it would then cause a substantial loss of revenue.

Mr. Cronin

I am sure that we are relieved to hear the Financial Secretary's explanation, but in the context of the events of recent weeks it sounded extremely "fishy".

The Financial Secretary said that the first Amendment would give considerable benefit to pleasure parties. If this is to be a temporary Measure I cannot imagine that there will be many pleasure parties who will use derv during the coming winter. He also said that it would benefit the users of diesel cars. I should like him to tell us what percentage of the cars that are used for private purposes use derv. I should think that the proportion must be under 1 per cent. I am rather surprised that that should have been introduced as a serious argument. A diesel-engined private car is an extremely rare phenomenon.

There seemed to be some substance in his suggestion that a good deal of benefit would accrue to the passenger transport industry. We see no objection to that. We are all strongly in favour of being able to travel more cheaply. I certainly cannot accept his suggestion that the majority of goods haulage vehicles are petrol driven. I am sure that if the right hon. Gentleman examines the figures more closely he will see that the majority are actual users of diesel oil.

7.0 p.m.

My hon. Friend the Member for Bradford, East (Mr. McLeavy) very ably pointed out the burden that would fall upon the road transport industry if this Amendment was rejected, but I wish to approach the matter from the point of view of its more indirect effects. The largest user of road transport is undoubtedly the food industry. My information is that the effect of Clause 1 will be to place a burden of about £15 million a year on this industry. That is going to make a very large difference to food prices.

I know that hon. Gentlemen opposite adopt a somewhat cavalier attitude towards increases in the price of food, but to us on this side of the Committee it seems intolerable that after the removal of food subsidies by the Government the food industry should be burdened with this extra £15 million by way of increased costs of transport. The bread and grain section of the food industry is certainly one of the largest users of transport in the industry. It is clear, therefore, that unless Clause 1 is amended it will cause a definite and marked increase in the price of bread, on top of the other increases for which the Chancellor is responsible.

The second largest user of road transport driven by derv is, of course, that which deals with the movement of industrial raw materials and manufactured goods. That means that this tax is actually helping to turn the terms of trade against us. It will increase the price of our raw materials and manufactured goods. This seems to me to be a peculiarly disastrous policy in view of the present economic circumstances of the country. We all know that the unfortunate events of the last few weeks have caused a sharp turn in the terms of trade, but we do not expect the Treasury to enhance that undesirable effect by imposing this extraordinary tax on road transport.

All of us on this side listened this afternoon with great disappointment to the brutal blow aimed at the Scottish shale oil industry by the Financial Secretary's refusal to accept an earlier Amendment. If the right hon. Gentleman could only bring himself to accept this Amendment it would be of substantial benefit to Scotland, because three-quarters of the shale oil produced in Scotland becomes derv. I understand that the shale oil industry could produce an even greater proportion of derv from its total production. The right hon. Gentleman is not merely dealing a blow at the United Kingdom, but very specifically at Scotland in his refractory attitude over this Amendment.

This tax will have a very important bearing on diesel engine development. The Financial Secretary suggested that it would be undesirable to increase the advantage that diesel engines have over petrol engines. Diesel engines are unquestionably more efficient than petrol engines. They are, as the right hon. Gentleman pointed out, simpler and cheaper to run. But a good deal of further research is necessary to improve diesel engines.

The initial cost of the diesel engine is somewhat high, and on top of that the actual weight of the engine, which must be an important factor in transport, is much more than that of a petrol engine. It is essential for industry that further research should take place with the purpose of improving diesel engines. We all know that under private enterprise research is best stimulated by the coarse chink of money. If it is now to be so expensive to run diesel engines we can be quite certain that any research into them will languish and that our very good standing in that field of motor engineering is going to deteriorate.

This Bill is a bad Bill. We cannot go into that now because it would obviously involve us in being ruled out of order by the Chair. But if this Amendment were accepted it would at least prevent the Bill from being a very much worse Measure, and I therefore hope that the Financial Secretary will give the matter further thought with a view to seeing what he can do to help the hard pressed road haulage industry.

Mr. Pargiter

I am concerned with what the Financial Secretary said in his attempt to defend what he must himself admit is a very bad case. He referred, first, to the loss of £6½ million which he said the Government could not afford. The right hon. Gentleman also said that successive Governments had conceded that the users of oil and petrol must contribute a proportionate amount towards the total revenue of the country.

What is the right hon. Gentleman doing there? There is now a move in this direction which reduces the total volume, but instead of spreading the cost evenly over the nation as a whole the Chancellor has selected a particular section of the community to bear the whole cost. That is totally unfair and is adding to costs generally at a time when I should have thought the Government would least have wanted to add to them.

Let us look at the effect of this proposal on the transport of goods. What is the basis of costing? I think it is generally accepted in industry that the basis of costing is a percentage of on-cost on the cost of labour and materials. The cost of materials includes transport costs. Therefore, it is no good saying that manufacturers will alter their on-cost system because the cost of their raw materials has risen. The extra cost of the raw materials will be added to the on-cost, which will double the effect, and if it happens to be a semi-manufactured product that extra cost will go on to the on-cost of something else and we shall finish up with an amount six times as great as is estimated.

These are matters which the Minister must know are factual and which can be established. To endeavour to say that it will only add a very small proportion to the cost is nonsense, because the Minister knows quite well that industry does not work like that. The increased cost of the finished product is out of all proportion to the increased cost imposed at the beginning. That is certainly so with road transport.

The Minister may be technically correct when he says that a large number of goods vehicles are petrol driven, but he will find that most goods vehicles are small delivery vans, the vast majority of which, I agree, are petrol driven. I am not particularly concerned whether the number of such delivery vehicles are cut down to some extent or whether they are made to operate more efficiently.

The Minister knows that 90 per cent. or more of the heavy vehicles used in the major transport industry of the country are now compression ignition engines, which are the ones with which we are really concerned. It is really begging the question for the Minister to say that what this Amendment seeks to do would be unfair to a large number of users of road transport. He knows quite well that the issue is fairly clear—the delivery vehicle is a petrol driven vehicle and the heavy vehicle is the diesel-engined vehicle.

The right hon. Gentleman went further and said, in effect, that for the future we must endeavour to restrict progress as far as diesel engines are concerned because there may be more difficulty about the supply of diesel engine fuel than of petrol. It is a shocking admission for the Government to say that we must press for less efficiency in our transport industry because there may be difficulty about the supply of a particular type of fuel.

I am not at all sure, in the absence of a good deal more information, that this is founded on fact, because derv oil can be derived from many sources. I know that the right hon. Gentleman is probably or, possibly, thinking in terms of the breakdown of crude oil to provide large quantities of fuel for jet engines and things of that kind, in which case there may not be a surplus of petrol. But there will be other ways and means of dealing with that other than by preventing efficiency. That is to me the most alarming part of the Financial Secretary's statement, implying, as it does, that instead of recognising the efficiency of the diesel engine and encouraging its future production we have to restrict it because of fuel supplies. That is a policy of despair.

I should have thought that the duty of the Government would be to promote efficiency and to see that the fuel was made available for the most efficient means of propulsion. I accept the view that it will be quite impossible to separate the question of this type of fuel with regard to passenger and goods vehicles. I recognise that if the Government accept the first Amendment it will inevitably lead to the acceptance of a similar Amendment dealing with passenger vehicles.

Here again, the right hon. Gentleman said that there are large numbers of commercial passenger vehicles which are

petrol driven. I venture to say that these are very old, very inefficient and ought to be off the road anyway; the sooner they go off the road the better. The vast majority of passenger commercial vehicles are, in fact, diesel engined vehicles. So it is clear that if we start putting up the cost of raw materials and fares, which will inevitably be reflected in wages sooner or later, and probably sooner—because we have a range of people who depend on the normal method of bargaining in the matter of wage increases and a vast number whose wages are governed by the cost-of-living index, and who will get automatic increases—the effect will be very considerable.

The whole of this proposal is bad. It singles out a particular section. We are endeavouring to minimise its worst features by seeing that industry does not suffer and I should have thought that we might have received more response from the Government than we seem likely to get.

Amendment negatived.

Amendment proposed: In page 2, line 10, at end add: (2) This section shall not have effect in relation to hydrocarbon oils purchased for the purpose of and intended to be used for the carriage of goods by road in a goods vehicle as defined in subsection (2) of section one of the Road and Rail Traffic Act. 1933. Provided that hydrocarbon oils shall not be deemed to be purchased for such purpose unless they are purchased by or on the written authority of the holder of an A, B or C licence within the meaning of section two of the said Act and unless on the occasion of each such purchase the purchaser completes and signs a form and a duplicate thereof which shall be handed to him by the seller stating in which vehicle, identifying it, it is intended that such hydrocarbon oils are to be used.—[Mr. Gordon Walker.]

Question put, That those words be there added.

The Committee divided: Ayes 192, Noes 239.

Division No. 25.] AYES [7.15 p.m.
Ainsley, J. W. Boardman, H. Champion, A. J.
Allaun, Frank (Salford, E.) Bottomley, Rt. Hon. A. G. Chapman, W. D.
Allen, Arthur (Bosworth) Bowden, H. W. (Leicester, S. W.) Chetwynd, G. R.
Allen, Scholefield (Crewe) Braddock, Mrs. Elizabeth Clunie, J.
Anderson, Frank Brockway, A. F. Coldrick, W.
Awbery, S. S. Broughton, Dr. A. D. D. Collick, P. H. (Birkenhead)
Bacon, Miss Alice Brown, Thomas (Ince) Collins, V. J. (Shoreditch & Finsbury)
Bence, C. R. (Dunbartonshire, E.) Burke, W. A. Corbet, Mrs. Freda
Benson, C. Burton, Miss F. E. Craddock, George (Bradford, S.)
Blackburn, F. Butler, Herbert (Hackney, C.) Cronin, J. D.
Blenkinsop, A. Callaghan, L. J. Cullen, Mrs. A.
Blyton, W. R. Castle, Mrs. B. A. Darling, George (Hillsborough)
Davies, Ernest (Enfield, E.) Lee, Frederick (Newton) Roberts, Albert (Normanton)
Davies, Harold (Leek) Lever, Leslie (Ardwick) Roberts, Goronwy (Caernarvon)
Davies, Stephen (Merthyr) Lewis, Arthur Robinson, Kenneth (St. Pancras, N.)
Deer, G. Logan, D. G. Ross, William
Delargy, H. J. Mabon, Dr. J. Dickson Royle, C.
Dodds, N. N. MacColl, J. E. Short, E. W.
Donnelly, D. L. McGhee, H. G. Shurmer, P. L. E.
Dugdale, Rt. Hn. John (W. Brmwch) McInnes, J. Silverman, Julius (Aston)
Edwards, Rt. Hon. John (Brighouse) McKay, John (Wallsend) Silverman, Sydney (Nelson)
Edwards, Rt. Hon. Ness (Caerphilly) McLeavy, Frank Skeffington, A. M.
Edwards, Robert (Bilston) MacMillan, M. K. (Western Isles) Slater, Mrs. H. (Stoke, N.)
Edwards, W. J. (Stepney) MacPherson, Malcolm (Stirling) Slater, J. (Sedgefield)
Evans, Albert (Islington, S. W.) Mahon, Simon Smith, Ellis (Stoke, S.)
Fernyhough, E. Mainwaring, W. H. Sorensen, R. W.
Fienburgh, W. Mallallieu, E. L. (Brigg) Soskice, Rt. Hon. Sir Frank
Forman, J. C. Mann, Mrs. Jean Sparks, J. A.
Fraser, Thomas (Hamilton) Marquand, Rt. Hon. H. A. Steele, T.
Gaitskell, Rt. Hon. H. T. N. Mason, Roy Stewart, Michael (Fulham)
Gibson, C. W. Mayhew, C. P. Stones, W. (Consett)
Cordon Walker, Rt. Hon. P. C. Messer, Sir F. Strauss, Rt. Hon. George (Vauxhall)
Greenwood, Anthony Mikardo, Ian Summerskill, Rt. Hon. E.
Grey, C. F. Mitchison, G. R. Sylvester, G. O.
Griffiths, David (Rother Valley) Monslow, W. Taylor, John (West Lothian)
Griffiths, Rt. Hon. James (Llanelly) Moody, A. S. Thomas, George (Cardiff)
Hale, Leslie Morris, Percy (Swansea, W.) Thomas, Iorwerth (Rhondda, W.)
Hall, Rt. Hn. Glenvil (Colne Valley) Mort, D. L. Thomson, George (Dundee, E.)
Hamilton, W. W. Moss, R. Timmons, J.
Hannan, W. Moyle, A. Tomney, F.
Harrison, J. (Nottingham, N.) Mulley, F. W. Viant, S. P.
Hastings, S. Neal, Harold (Bolsover) Warbey, W. N.
Hayman, F. H. Oliver, G. H. Watkins, T. E.
Healey, Denis Oram, A. E. Weitzman, D.
Herbison, Miss M. Orbach, M. Wells, Percy (Faversham)
Hobson, C. R. Owen, W. J. Wells, William (Walsall, N.)
Holman, P. Paling, Rt. Hon. W. (Dearne Valley) West, D. G.
Howell, Charles (Perry Barr) Palmer, A. M. F. Wheeldon, W. E.
Hughes, Cledwyn (Anglesey) Pannell, Charles (Leeds, W.) White, Henry (Derbyshire, N. E.)
Hughes, Emrys (S. Ayrshire) Pargiter, G. A. Wilcock, Group Capt. C. A. B.
Hunter, A. E. Parker, J. Wilkins, W. A.
Hynd, J. B. (Attercliffe) Parkin, B. T. Williams, David (Neath)
Irvine, A. J. (Edge Hill) Paton, John Williams, Rev. Llywelyn (Ab'tillery)
Irving, S. (Dartford) Pearson, A. Williams, Ronald (Wigan)
Isaacs, Rt. Hon. G. A. Pentland, N. Williams, Rt. Hon. T. (Don Valley)
Jay, Rt. Hon. D. P. T. Price, J. T. (Westhoughton) Williams, W. R. (Openshaw)
Jeger, Mrs. Lena(Holbn & st. Pncs, S.) Price, Phillips (Gloucestershire, W.) Williams, W. T. (Barons Court)
Johnson, James (Rugby) Probert, A. R. Willis, Eustace (Edinburgh, E.)
Jones, Rt. Hon. A. Creech (Wakefield) Proctor, W. T. Wilson, Rt. Hon. Harold (Huyton)
Jones, Jack (Rotherham) Pryde, D. J. Winterbottom, Richard
Jones, J. Idwal (Wrexham) Randall, H. E. Woof, R. E.
Jones, T. W. (Merioneth) Rankin, John Yates, V. (Ladywood)
Key, Rt. Hon. C. W. Redhead, E. C.
King, Dr. H. M. Reeves, J. TELLERS FOR THE AYES:
Lawson, G. M. Reid, William Mr. Holmes and Mr. Simmons.
NOES
Agnew, Cmdr. P. G. Bullus, Wing Commander E. E. Emmet, Hon. Mrs. Evelyn
Aitken, W. T. Burden, F. F. A. Errington, Sir Eric
Allan, R. A. (Paddington, S.) Butcher, Sir Herbert Farey-Jones, F. W.
Alport, C. J. M. Butler, Rt. Hn. R. A. (Saffron Walden) Fell, A.
Amery, Julian (Preston, N.) Campbell, Sir David Fisher, Nigel
Amory, Rt. Hn. Heathcoat (Tiverton) Carr, Robert Fraser, Hon. Hugh (Stone)
Arbuthnot, John Cary, Sir Robert Freeth, D. K.
Armstrong, C. W. Chichester-Clark, R. Galbraith, Hon. T. G. D.
Ashton, H. Clarke, Brig. Terence (Portsmth, W.) Garner-Evans, E. H.
Atkins, H. E. Conant, Maj. Sir Roger George, J. C. (Pollok)
Baldwin, A. E. Cooper, A. E. Gibson-Watt, D.
Balniel, Lord Cordeaux. Lt.-Col. J. K. Glover, D.
Barber, Anthony Corfield, Capt. F. V. Godber, J. B.
Barlow, Sir John Craddock, Beresford (Spelthorne) Gomme-Duncan, Col. Sir Alan
Baxter, Sir Beverley Crouch, R. F. Gower, H. R.
Beamish, Maj. Tufton Cunningham, Knox Graham, Sir Fergus
Bell, Philip (Bolton, E.) Currie, G. B. H. Grant-Ferris, Wg Cdr. R. (Nantwich)
Bell, Ronald (Bucks, S.) Davidson, Viscountess Green, A.
Bennett, F. M. (Torquay) Deedes, W. F. Gresham Cooke, R.
Bevins, J. R. (Toxteth) Digby, Simon Wingfield Grimond, J.
Birch, Rt. Hon. Nigel Donaldson, Cmdr. C. E. McA. Grimston, Sir Robert (Westbury)
Bishop, F. P. Doughty, C. J. A. Grosvenor, Lt.-Col. R. G.
Body, R. F. Drayson, G. B. Gurden, Harold
Bossom, Sir Alfred du Cann, E. D. L. Hall, John (Wycombe)
Boyd-Carpenter, Rt. Hon. J. A. Dugdale, Rt. Hn. Sir T. (Richmond) Harris, Frederic (Croydon, N. W.)
Brooke, Rt. Hon. Henry Duncan, Capt. J. A. L. Harris, Reader (Heston)
Browne, J. Nixon (Craigton) Duthie, W. S. Harrison, A. B. C. (Maldon)
Buchan-Hepburn, Rt. Hon. P. G. T. Eden, J. B. (Bournemonth, West) Harvey, Ian (Harrow, E.)
Harvey, John (Walthamstow, E.) McAdden, S. J. Robinson, Sir Roland (Blackpool, S.)
Harvle-Watt, Sir George McCallum, Major Sir Duncan Rodgers, John (Sevenoaks)
Heald, Rt. Hon. Sir Lionel Macdonald, Sir Peter Roper, Sir Harold
Heath, Rt. Hon. E. R. G. McKibbin, A. J. Ropner, Col. Sir Leonard
Henderson, John (Cathcart) Mackie, J. H. (Galloway) Russell, R. S.
Hesketh, R. F. Maclean, Fitzroy (Lancaster) Schofield, Lt.-Col. W.
Hicks-Beach, Maj. W. W. McLean, Neil (Inverness) Scott-Miller, Cmdr. R.
Hill, Rt. Hon. Charles (Luton) MacLeod, John (Ross & Cromarty) Sharples, R. C.
Hill, Mrs. E. (Wythenshawe) Macmillan, Maurice (Halifax) Shepherd, William
Hinchingbrooke, Viscount Macpherson, Niall (Dumfries) Simon, J. E. S. (Middlesbrough, W.)
Hirst, Geoffrey Maddan, Martin Smithers, Peter (Winchester)
Holland-Martin, C. J. Maitland, Cdr. J. F. W. (Horncastle) Spearman, Sir Alexander
Holt, A. F. Maitland, Hon. Patrick (Lanark) Speir, R. M.
Hornby, R. P. Manningham-Buller, Rt. Hn. Sir R. Stanley, Capt. Hon. Richard
Howard, Hon. Greville (St. Ives) Markham, Major Sir Frank Stevens, Geoffrey
Howard, John (Test) Marlowe, A. A. H. Steward, Harold (Stockport, S.)
Hughes Hallett, Vice-Admiral J. Marples, A. E. Stewart, Henderson (Fife, E.)
Hughes-Young, M. H. C. Marshall, Douglas Stoddart-Scott, Col. M.
Hutchison, Sir Ian Clark (E'b'gh, W.) Mathew, R. Storey, S.
Hyde, Montgomery Maude, Angus Studholme, Sir Henry
Hylton-Foster, Sir H. B. H. Maudling, Rt. Hon. R. Sumner, W. D. M. (Orpington)
Iremonger, T. L. Maydon, Lt.-Cmdr. S. L. C. Taylor, William (Bradford, N.)
Irvine, Bryant Godman (Rye) Molson, Rt. Hon. Hugh Teeling, W.
Jenkins, Robert (Dulwich) Morrison, John (Salisbury) Temple, J. M.
Jennings, J. C. (Burton) Mott-Radclyffe, C. E. Thomas, Leslie (Canterbury)
Jennings, Sir Roland (Hallam) Nabarro, G. D. N. Thompson, Kenneth (Walton)
Johnson, Dr. Donald (Carlisle) Nairn, D. L. S. Thompson, Lt.-Cdr. R.(Croydon, S.)
Johnson, Eric (Blackley) Neave, Airey Thorneycroft, Rt. Hon. P.
Joseph, Sir Keith Nicholls, Harmar Tiley, A. (Bradford, W.)
Kaberry, D. Nicholson, Godfrey (Farnham) Tilney, John (Wavertree)
Keegan, D. Nicolson, N. (B'n'm'th, E. & Chr'ch) Turner, H. F. L.
Kerby, Capt. H. B. Nugent, G. R. H. Turton, Rt. Hon. R. H.
Kerr, H. W. Oakshott, H. D. Vickers, Miss J. H.
Kershaw, J. A. O'Neill, Hn. Phelim (Co. Antrim, N.) Vosper, D. F.
Kimball, M. Orr, Capt. L. P. S. Wakefield, Edward (Derbyshire, W.)
Lagden, G. W. Osborne, C. Wakefield, Sir Wavell (St. M'lebone)
Lambert, Hon. G. Page, R. G. Walker-Smith, D. C.
Lambton, Viscount Pannell, N. A. (Kirkdale) Wall, Major Patrick
Lancaster, Col. C. G. Partridge, E. Ward, Hon. George (Worcester)
Leavey, J. A. Peyton, J. W. W. Ward, Dame Irene (Tynemouth)
Waterhouse, Capt. Rt. Hon. C.
Leburn, W. G. Pilkington, Capt. R. A. Watkinson, Rt. Hon. Harold
Legge-Bourke, Maj. E. A. H. Pott, H. P. Webbe, Sir H.
Legh, Hon. Peter (Petersfield) Powell, J. Enoch Whitelaw, W. S. I. (Penrith & Border)
Lindsay, Hon. James (Devon, N.) Price, David (Eastleigh) Williams, Paul (Sunderland, S.)
Lindsay, Martin (Solihull) Prior-Palmer, Brig. O. L. Williams, R. Dudley (Exeter)
Linstead, Sir H. N. Raikes, Sir Victor Wills, G. (Bridgwater)
Llewellyn, D. T. Ramsden, J. E. Wilson, Geoffrey (Truro)
Lloyd, Maj. Sir Guy (Renfrew, E.) Rawlinson, Peter Wood, Hon. R.
Lloyd-George, Maj. Rt. Hon. G. Redmayne, M.
Longden, Gilbert Rees-Davies, W. R. TELLERS FOR THE NOES:
Lucas, Sir Jocelyn (Portsmouth, S.) Renton, D. L. M. Colonel J. H. Harrison and
Lucas, P. B. (Brentford & Chiswick) Ridsdale, J. E. Mr. Bryan.
Lucas-Tooth, Sir Hugh Rippon, A. G. F.
Mr. Ernest Davies

I beg to move, in page 2, line 10, at the end to add: (2) This section shall not have effect in relation to hydrocarbon oils purchased for the purpose of and intended to be used for the carriage of passengers in a vehicle licensed under a road service licence granted under section seventy-two of the Road Traffic Act, 1930, or purchased for the purpose of and intended to be used for the carriage of passengers by the London Transport Executive. The Financial Secretary dismissed the previous Amendments with unconvincing arguments and in rather a cavalier manner. But a far stronger case can be made out for this Amendment, and I do not think that the right hon. Gentleman can produce arguments to justify rejection of it.

Its purpose is to exempt all public service vehicles from the shilling tax increase; that is, "public service vehicles" as defined by the respective Acts. It relates to buses engaged in stage services and buses and coaches engaged on express services. The reason why we have put down this Amendment and consider it to be so important is that the road passenger transport industry as a whole has been in considerable difficulty over a long period. Whether or not the tax be increased a large number of undertakings, both municipal and private, will have to put up their fares. A large number of applications to increase fares are now before the traffic commissioners, and decisions upon them are awaited.

During the last month there has been a distinct deterioration in the services in some areas, particularly some rural areas. In many cases, because of rising costs, it has been necessary to cut out some of the services which have been carried on at a loss for a considerable time. Certain undertakings claim that at least 50 per cent. of the services which they operate are run at a loss. It is not easy for those undertakings to put up their fares to cover costs, not only because the process takes a certain amount of time, but also because the transport industry is subject to the law of diminishing returns. Although that may not apply so much at the moment, in view of petrol rationing, the fact remains that some undertakings will have to raise their charges, irrespective of this tax. They will be faced with further difficulties, and there will be a threat to the public of a further deterioration in the service.

The shilling increase will have a direct effect on the whole community, and will result in hardship. There is no question that the vast majority of the people use road transport in the course of their business and normal life. A very large number, many millions, travel to their work daily by road passenger transport and this tax increase will be a direct tax upon them as they go about their essential business.

The effect of this tax is not confined to the actual increase which is to be passed on to the passenger in the way in which the Bill permits. At the same time, owing to higher prices being charged for motor fuel, there is to be an increase in other costs. It is most unfortunate that the petroleum companies have decided to pass on to the consumer the whole of the increase—if not more—arising from the present situation.

In rejecting the previous Amendments, the Financial Secretary quoted the cost to the Exchequer. One of his reasons for rejecting them was that they would result in the elimination of a vast portion of the revenue which this tax is designed to bring in. I estimate that the cost to the Exchequer of exempting road passenger vehicles from this extra shilling tax would not be great; that it could be afforded by the Exchequer, and that the amount, comparatively speaking, is so small that it would be worth while waiving it, to obviate the burden resulting from higher fares and the complications arising therefrom.

I estimate that it would cost only £4 million to the end of this financial year. That figure is based upon the amount brought in by the 2s. 6d. tax, which is estimated at £31 million, less the amount lost by the 10 per cent. reduction in the consumption of fuel, which public service vehicle undertakings have been instructed to bring about. On that basis it is estimated that the extra shilling would bring in about £4 million. Surely, in order to bring in £4 million of revenue, the Exchequer cannot justify causing higher fares to be charged by all bus and coach operators, and a large number of the travelling public having to pay higher fares daily? The hardship which will result, let alone the inflation which will follow, will far outweigh the advantages of fortifying the revenue by £4 million.

7.30 p.m.

The second reason why it is highly desirable that bus and coach undertakings should be exempted from this additional shilling duty is the complication of the licensing system which will be brought about by Clause 2 to enable the undertakings to raise their fares without going through the normal procedures. If the taxation is imposed, the undertakings must be enabled to raise their charges; otherwise the industry will not be able to carry on. The fact that by putting up the tax it becomes necessary to by-pass the licensing authority and to remove the protection which the traffic commissioners provide to the public, is most unfortunate.

Under the licensing system these undertakings have certain monopolistic rights. In a very large number of cases there is no competition, and only the traffic commissioners protect the travelling public by making certain that fares are charged on a reasonable level to meet costs, that adequate services are provided, both remunerative and unremunerative, and that the general over-all transport situation in both urban and rural areas is planned and is under control.

If the protection is removed, certain of the undertakings may take advantage of the position and raise their fares to the maximum permitted under the Bill, one penny in the shilling or in eightpence, as the case may be, and the public will suffer. It is no use saying that this is the maximum; when private enterprise is given a maximum—

The Chairman

We are not dealing with Clause 2 yet.

Mr. Davies

I fully appreciate that, Sir Charles. If the shilling is imposed it will be necessary to make provision in Clause 2 but if it is not imposed no provision will be necessary. I will not pursue that argument any further.

Mr. Ellis Smith (Stoke-on-Trent, South)

May we have the Ruling of the Chair clearly, so we can follow the point?

The Chairman

I said that we were not discussing Clause 2 yet.

Mr. Davies

If the tax is imposed, Clause 2 is essential. If the tax is not imposed on public service vehicles, as we are now suggesting, Clause 2 will not be essential. That was the basis on which I was presenting my argument. I have made my case, Sir Charles, and I do not wish to pursue the matter further.

There is a clear case for exempting this section of road transport, which affects the whole community. We are putting forward a practical proposition. In previous debates, the Government spokesman has claimed, as the Financial Secretary did on the previous Amendment, that it is not practicable to discriminate. How is it that every other country in Western Europe is able to discriminate between the tax on diesel fuel and the tax on petrol? Why are we the one country which finds it impossible to devise ways and means of exempting public service vehicles?

It can be arranged. I have sufficient respect for our Civil Service to believe that it could devise a way just as effectively as our Continental neighbours. I ask the Financial Secretary, in replying to the Amendment, not to produce once more that argument to which I have referred. If the Amendment is not accepted, the travelling public will pay higher fares. That will mean a direct increase in the cost of living and will have a direct effect on wage demands. By exempting these buses and coaches from the extra shilling duty a very considerable inflationary process will he avoided.

Mr. McLeavy

I want to supplement what my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) has said about road passenger transport vehicles. I have spoken on many occasions on taxation and do not propose to elaborate some of the points which I have made very frequently. I would point out to the Financial Secretary that the contention of my hon. Friend that the passenger transport industry is exceptional has never yet been accepted by the Government.

Road passenger transport does not carry a consignment of goods from one given point to another, but picks up passengers here and there. Sometimes we have a handful in the bus, and at peak periods we may have the bus full. Road passenger transport is an entirely different proposition. In addition to the additional 1s. tax which the Bill proposes, the bus undertakings have to meet the additional charge for the commodity itself.

The undertakings were receiving 2d. per gallon by way of rebate from the petroleum people for bulk purchase. That rebate has been discontinued, so, in point of fact, the additional cost which has to be charged to the travelling public is 1s. 6d. per gallon, because of the action of the Government and of the petrol companies.

Transport undertakings are very alarmed about this position. They can come to the point when it is not possible to go on increasing fares. If we continuously increase fares we get a reduction in the volume of traffic. The Financial Secretary ought to have statistics—I am sure that the Treasury has—showing the very serious financial position, particularly of municipal undertakings. This new tax will make their position infinitely worse.

I do not believe that this is a fair way of dealing with the problem. It will certainly cause increasing financial difficulties to municipal transport undertakings. It will mean that the travelling public will have to pay much higher fares in the Provinces than in London, and the increased charge to the travelling public, plus other increases arising from the effects of Government action in other directions, will be an incentive to a demand for increased wages to meet the position.

This is an occasion when the Minister might well accept the Amendment and enable the passenger transport industry to face a very difficult problem. My hon. Friend the Member for Enfield, East said that it would cost about £4 million in the present financial year. That would be very cheap compared with the consequences of pushing through this tax, which is outrageous in its effects on the transport industry.

Mr. H. Brooke

The hon. Member for Enfield, East (Mr. Ernest Davies) charged me with adopting a cavalier manner in my previous speech. I must say that I thought he was hardly chivalrous towards his hon. Friends when he said that he could make out a far better case for this Amendment than they succeeded in making for the previous Amendment.

The hon. Member is, I know, very familiar with this subject. He has studied it for many years. I think it was only last summer that, on the Finance Bill, we debated a not dissimilar Amendment moved by the hon. Member to reduce by 6d. what then was the 2s. 6d. rate of duty for public service vehicles, although I fancy that on that occasion he confined the scope of the Amendment to derv and left out petrol buses. Therefore this is not a new topic to the Committee. On the previous occasion the Amendment was negatived without a Division.

A number of statements have been made about the effect of this tax on the cost of living. The facts were clearly stated by the Chancellor when he moved the Second Reading of the Bill. In this case there can be no dubiety. Under the terms of the Bill as it stands, if fares were raised to their permitted maximum that would make a difference of one-fifth of a point in the cost of living.

The hon. Member said that all fares would be raised to the maximum. We shall wait and see. If bus companies have to examine what the traffic will bear it may be that not all will seek the right to raise fares to the maximum extent. At all events we have a figure clearly set out; and I should not like to allow anyone to challenge the conclusion reached by expert statisticians who have gone into this matter that the maximum increase in bus fares which the Bill would permit would amount to one-fifth of a point.

I am very sorry that the cost of the additional tax should have to be borne not only by the private car owners—not only by goods vehicle operators but by bus companies and their passengers also—but I must tell the Committee frankly that here we have no choice. This Amendment would be impracticable, and, in addition, would set up repercussions which would raise the eventual cost far higher than the £4 million, which I grant at once the hon. Member perfectly correctly estimated as the likely cost in this financial year.

7.45 p.m.

As to the practicability of the Amendment, we must look at the risk of abuse. I know that there are means of checking the derv supplied to various users. We do not want to do anything which would make those checks more difficult or complicated. Also, on this occasion the hon. Member has granted that he has moved an Amendment which would extend the differential to petrol used in buses as well as to derv. He and I are both aware that the number of petrol buses is limited.

I am not seeking to suggest that the petrol-driven bus is a common sight—although it still is in some parts of the country—but I think that hon. Members on all sides of the Committee would hesitate to open a loophole through which petrol might flow into the black market. We had a considerable experience of these difficulties in war-time and in the old days of petrol rationing. We are now setting up this additional tax for what we all hope is going to be quite a short period, and it would be disastrous if, by accepting this Amendment, we did anything which offered scope for the diversion of petrol—which would be cheap petrol owing to the tax remission—which might get into the wrong hands, and there would be plenty of wrong hands waiting for it.

It is my duty to point out to the Committee what would actually happen if the Amendment were adopted. It would apply to buses but it would do one or two rather queer things also. It would not bring any benefit to the privately-owned works bus taking men to and from the factory, it would not bring any benefit to the school bus run by the local education authority, but—rather astonishingly—it would give the full 1s. rebate to excursion and pleasure coach trips. It would be very difficult to justify that to public opinion. I am sure that, with all his experience of the legislation on this matter, the hon. Member for Enfield is conscious of the difficulties which we have had over many years in defining public service vehicles so as to exclude from benefit the pleasure coach whilst retaining within the definition of what we were trying to do the Green Line coach.

The estimate made by the hon. Member of the direct cost was absolutely correct, but we must also look at the indirect costs. Could we reasonably grant this tax concession in respect of buses if we withheld it from everybody else? Could we say that it is right that bus companies should not pay the extra 1s. if all goods operators are to pay it? Could we say that it was right that petrol and derv going into the tanks of buses should be free of the extra tax, whereas all derv going elsewhere had to pay the tax? Could we make this concession confined to buses and do nothing at all in respect of what we shall discuss when we consider the next Amendment, which I must not anticipate?

Mr. Ernest Davies

I know that the right hon. Gentleman sees the difference between exempting goods vehicles and road passenger vehicles because in the case of buses and coaches the direct saving is passed on to the passenger and that obviates the necessity for increasing fares; it is not the bus companies but the actual travelling public who will pay this additional amount. The Committee would accept that and would not say that one category ought not to be helped because another was also being helped.

Mr. Brooke

The hon. Member is now pursuing the argument with which he started his speech, that this Amendment of his is a good one, and that the previous Amendment moved by his hon. Friends was not nearly so good.

I am quite convinced that it would be impossible logically to justify to public opinion the exemption of buses from this extra tax when all the goods vehicles and other vehicles for which so powerful a plea was made on the last Amendment have to beg the tax. The truth is that if we made this change on behalf of buses, it would, in logic, have to be carried further, and the total revenue of £30 million in this financial year, although it would only fall directly, as a result of the Amendment, to £26 million, would nevertheless be whittled away by other concessions which on grounds of reason it would be necessary to make in addition.

Those are the grounds on which, with the greatest sympathy towards the bus companies, and especially the rural bus companies and those who travel in their vehicles, I cannot advise the Committee to accept the Amendment.

Question put, That those words be there added:—

The Committee divided: Ayes 187, Noes 233.

Division No. 26.] AYES [7.50 p.m.
Ainsley, J. W. Craddock, George (Bradford, S.) Hayman, F. H.
Allaun, Frank (Salford, E.) Cronin, J. D. Herbison, Miss M.
Allen, Arthur (Bosworth) Cullen, Mrs. A. Hobson, C. R.
Allen, Scholefield (Crewe) Davies, Ernest (Enfield, E.) Holman, P.
Anderson, Frank Davies, Harold (Leek) Howell, Charles (Perry Barr)
Awbery, S. S. Davies, Stephen (Merthyr) Hughes, Cledwyn (Anglesey)
Bacon, Miss Alice Deer, G. Hughes, Emrys (S. Ayrshire)
Balfour, A. Delargy, H. J. Hunter, A. E.
Bence, C. R. (Dunbartonshire, E.) Dodds, N. N. Hynd, J. B. (Attercliffe)
Benson, G. Donnelly, D. L. Irvine, A. J. (Edge Hill)
Blackburn, F. Dugdale, Rt. Hn. John (W. Brmwch) Irving, S. (Dartford)
Blenkinsop, A. Edwards, Rt. Hon. John (Brighouse) Isaacs, Rt. Hon. G. A.
Blyton, W. R. Edwards, Rt. Hon. Ness (Caerphilly) Jay, Rt. Hon. D. P. T.
Boardman, H. Edwards, Robert (Bilston) Jeger, Mrs. Lena (Holbn & St. Pancs, S.)
Bottomley, Rt. Hon. A. G. Edwards, W. J. (Stepney) Johnson, James (Rugby)
Bowden, H. W. (Leicester, S. W.) Evans, Albert (Islington, S. W.) Jones, Rt. Hon. A. Creech (Wakefield)
Braddock, Mrs. Elizabeth Fernyhough, E. Jones, Jack (Rotherham)
Brockway, A. F. Fienburgh, W. Jones, J. Idwal (Wrexham)
Broughton, Dr. A. D. D. Fletcher, Eric Jones, T. W. (Merioneth)
Brown, Thomas (Ince) Forman, J. C. Key, Rt. Hon. C. W.
Burke, W. A. Fraser, Thomas (Hamilton) King, Dr. H. M.
Burton, Miss F. E. Gordon Walker, Rt. Hon. P. C. Lawson, G. M.
Butler, Herbert (Hackney, C.) Greenwood, Anthony Lee, Frederick (Newton)
Callaghan, L. J. Grey, C. F. Lever, Leslie (Ardwick)
Castle, Mrs. B. A. Griffiths, David (Rother Valley) Lewis, Arthur
Champion, A. J. Griffiths, Rt. Hon. James (Llanelly) Logan, D. G.
Chapman, W. D. Hale, Leslie Mabon, Dr. J. Dickson
Chetwynd, G. R. Hall, Rt. Hn. Glenvil (Colne Valley) MacColl, J. E.
Clunie, J. Hamilton, W. W. McGhee, H. G.
Coldrick, W. Hannan, W. McInnes, J.
Collick, P. H. (Birkenhead) Harrison, J. (Nottingham, N.) McKay, John (Wallsend)
Corbet, Mrs. Freda Hastings, S. McLeavey, Frank
MacMillan, M. K. (Western Isles) Paton, John Summerskiil, Rt. Hon. E.
MacPherson, Malcolm (Stirling) Pentland, N. Sylvester, G. O.
Mahon, Simon Price, J. T. (Westhoughton) Taylor, John (West Lothian)
Mainwaring, W. H. Price, Philips (Gloucestershire, W.) Thomas, George (Cardiff)
Mallalieu, E. L. (Brigg) Probert, A. R. Thomas, Iorwerth (Rhondda, W.)
Mann, Mrs. Jean Proctor, W. T. Thomson, George (Dundee, E.)
Marquand, Rt. Hon. H. A. Pryde, D. J. Timmons, J.
Mason, Roy Randall, H. E. Tomney, F.
Mayhew, C. P. Rankin, John Viant, S. P.
Mellish, R. J. Redhead, E. C. Warbey, W. N.
Messer, Sir F. Reeves, J. Watkins, T. E.
Mikardo, Ian Reid, William Weitzman, D.
Mitchison, G. R. Roberts, Albert (Normanton) Wells, Percy (Faversham)
Monslow, W. Roberts, Goronwy (Caernarvon) Wells, William (Walsall, N.)
Moody, A. S. Robinson, Kenneth (St. Pancras, N.) West, D. G.
Morris, Percy (Swansea, W.) Ross, William Wheeldon, W. E.
Mort, D. L. Royle, C. White, Henry (Derbyshire, N. E.)
Moss, R. Short, E. W. Wilcock, Group Capt. C. A. B.
Moyle, A. Shurmer, P. L. E. Wilkins, W. A.
Mulley, F. W. Silverman, Sydney (Nelson) Williams, David (Neath)
Neal, Harold (Bolsover) Simmons, C. J. (Brierley Hill) Williams, Rev. Llywelyn (Ab'tillery)
Oliver, G. H. Skeffington, A. M. Williams, Ronald (Wigan)
Oram, A. E. Slater, Mrs. H. (Stoke, N.) Williams, Rt. Hon. T. (Don Valley)
Orbach, M. Slater, J. (Sedgefield) Williams, W. R. (Openshaw)
Owen, W. J. Smith, Ellis (Stoke, S.) Willis, Eustace (Edinburgh, E.)
Paling, Rt. Hon. W. (Dearne Valley) Sorensen, R. W. Wilson, Rt. Hon. Harold (Huyton)
Palmer, A. M. F. Soskice, Rt. Hon. Sir Frank Winterbottom, Richard
Pannell, Charles (Leeds, W.) Sparks, J. A. Woof, R. E.
Pargiter, G. A. Steele, T. Yates, V. (Ladywood)
Parker, J. Stewart, Michael (Fulham)
Parkin, B. T. Stones, W. (Consett) TELLERS FOR THE AYES:
Mr. Holmes and Mr. Pearson.
NOES
Agnew, Cmdr. P. G. Drayson, G. B. Hutchison, Sir Ian Clark (E'b'gh, W.)
Aitken, W. T. du Cann, E. D. L. Hyde, Montgomery
Allan, R. A. (Paddington, S.) Dugdale, Rt. Hn. Sir T. (Richmond) Hylton-Foster, sir H. B. H.
Alport, C. J. M. Duncan, Capt. J. A. L. Iremonger, T. L.
Amory, Rt. Hn. Heathcoat (Tiverton) Duthie, W. S. Irvine, Bryant Godman (Rye)
Arbuthnot, John Eden, J. B. (Bournemouth, West) Jenkins, Robert (Dulwich)
Armstrong, C. W. Emmet, Hon. Mrs. Evelyn Jennings, J. C. (Burton)
Ashton, H. Errington, Sir Eric Jennings, Sir Roland (Hallam)
Atkins, H. E. Farey-Jones, F. W. Johnson, Dr. Donald (Carlisle)
Baldwin, A. E. Fell, A. Johnson, Eric (Blackley)
Balniel, Lord Fisher, Nigel Joseph, Sir Keith
Barber, Anthony Freeth, D. K. Kaberry, D.
Barlow, Sir John Garbraith, Hon. T. G. D. Keegan, D.
Baxter, Sir Beverley Carner-Evans, E. H. Kerby, Capt. H. B.
Beamish, Maj. Tufton George, J, C. (Pollok) Kerr, H. W.
Bell, Philip (Bolton, E.) Gibson-Watt, D. Kershaw, J. A.
Bell, Ronald (Bucks, S.) Glover, D. Kimball, M.
Bennett, F. M. (Torquay) Godber, J. B. Lagden, G. W.
Bevins, J. R. (Toxteth) Gomme-Duncan, Col. Sir Alan Lambert, Hon. C.
Birch, Rt. Hon. Nigel Gower, H. R. Lambton, Viscount
Bishop, F. P. Graham, Sir Fergus Lancaster, Col. C. G.
Body, R. F. Grant-Ferris, Wg Cdr. R. (Nantwich) Leavey, J. A.
Bossom, Sir Alfred Green, A. Leburn, W. G.
Boyd-Carpenter, Rt. Hon. J. A. Gresham Cooke, R. Legge-Bourke, Maj E. A. H.
Brooke, Rt. Hon. Henry Grimond, J. Lennox-Boyd, Rt. Hon. A. T.
Browne, J. Nixon (Craigton) Grimston, Sir Robert (Westbury) Lindsay, Hon. James (Devon, N.)
Bryan, P. Grosvenor, Lt.-Col. R. G. Lindsay, Martin (Solihull)
Bullus, Wing Commander E. E. Gurden, Harold Linstead, Sir H. N.
Burden, F. F. A. Hall, John (Wycombe) Llewellyn, D. T.
Butcher, Sir Herbert Harris, Frederic (Croydon, N. W.) Lloyd, Maj. Sir Guy (Renfrew, E.)
Butler, Rt. Hn. R. A. (Saffron Walden) Harris, Reader (Heston) Lloyd-George, Maj. Rt. Hon. G.
Campbell, Sir David Harrison, A. B. C. (Maldon) Longden, Gilbert
Carr, Robert Harvey, Ian (Harrow, E.) Lucas, Sir Jocelyn (Portsmouth, S.)
Cary, Sir Robert Harvey, John (Walthamstow, E.) Lucas, P. B. (Brentford & Chiswick)
Chichester-Clark, R. Harvie-Watt, Sir George Lucas-Tooth, Sir Hugh
Clarke, Brig. Terence (Portsmth, W.) Heald, Rt. Hon. Sir Lionel McAdden, S. J.
Conant, Maj. Sir Roger Heath, Rt. Hon. E. R. G. McCallum, Major Sir Duncan
Cooper, A. E. Henderson, John (Cathcart) Macdonald, Sir Peter
Cooper-Key, E. M. Hesketh, R. F. McKibbin, A. J.
Cordeaux, Lt.-Col. J. K. Hicks-Beach, Maj. W. W. Mackie, J. H. (Galloway)
Corfield, Capt. F. V. Hill, Rt. Hon. Charles (Luton) Maclean, Fitzroy (Lancaster)
Craddock, Beresford (Spelthorne) Hill, Mrs. E. (Wythenshawe) McLean, Neil (Inverness)
Crouch, R. F. Hinchingbrooke, Viscount MacLeod, John (Ross & Cromarty)
Cunningham, Knox Hirst, Geoffrey Macmillan, Maurice (Halifax)
Currie, G. B. H. Holland-Martin, C. J. Macpherson, Niall (Dumfries)
Davidson, Viscountess Hornby, R. P. Maddan, Martin
Deedes, W. F. Howard, Hon. Greville (St. Ives) Maitland, Cdr. J. F. W. (Horncastle)
Digby, Simon Wingfield Howard, John (Test) Maitland, Hon. Patrick (Lanark)
Donaldson, Cmdr. C. E. McA. Hughes Hallett, Vice-Admiral J. Manningham-Buller, Rt. Hn. Sir R.
Doughty, C. J. A. Hughes-Young, M. H. C. Markham, Major Sir Frank
Marlowe, A. A. H. Rawlinson, Peter Thomas, Leslie (Canterbury)
Marples, A. E. Redmayne, M. Thompson, Kenneth (Walton)
Mathew, R. Rees-Davies, W. R. Thompson, Lt.-Cdr. R. (Croydon, S.)
Maude, Angus Renton, D. L. M. Thorneycroft, Rt. Hon. P.
Maudling, Rt. Hon. R. Ridsdale, J. E. Tiley, A. (Bradford, W.)
Maydon, Lt.-Comdr. S. L. C. Rippon, A. G. F. Tilney, John (Wavertree)
Molson, Rt. Hon. Hugh Robinson, Sir Roland (Blackpool, S.) Turner, H. F. L.
Mott-Radclyffe, C. E. Rodgers, John (Sevenoaks) Turton, Rt. Hon. R. H.
Nabarro, G. D. N. Roper, Sir Harold Vickers, Miss J. H.
Neave, Airey Ropner, Col. Sir Leonard Vosper, D. F.
Nicholls, Harmar Russell, R. S. Wakefield, Edward (Derbyshire, W.)
Nicholson, Godfrey (Farnham) Schofield, Lt.-Col. W. Wakefield, Sir Wavell (St. M'lebone)
Nicolson, N. (B'n'm'th, E. & Chr'ch) Scott-Miller, Cmdr. R. Walker-Smith, D. C.
Nugent, G. R. H. Sharples, R. C. Wall, Major Patrick
Oakshott, H. D. Shepherd, William Ward, Hon. George (Worcester)
O'Neill, Hn. Phelim (Co. Antrim, N.) Smithers, Peter (Winchester) Ward, Dame Irene (Tynemouth)
Orr, Capt. L. P. S. Spearman, Sir Alexander Waterhouse, Capt. Rt. Hon. C.
Osborne, C. Speir, R. M. Watkinson, Rt. Hon. Harold
Page, R. G. Stanley, Capt. Hon. Richard Webbe, Sir H.
Pannell, N. A. (Kirkdale) Stevens, Geoffrey Whitelaw, W. S. I. (Penrith & Border)
Partridge, E. Steward, Harold (Stockport, S.) Williams, Paul (Sunderland, S.)
Peyton, J. W. W. Stewart, Henderson (Fife, E.) Williams, R. Dudley (Exeter)
Pilkington, Capt. R. A. Stoddart-Scott, Col. M. Wills, G. (Bridgwater)
Pott, H. P. Storey, S. Wilson, Geoffrey (Truro)
Powell, J. Enoch Studholme, Sir Henry Wood, Hon. R.
Price, David (Eastleigh) Sumner, W. D. M. (Orpington)
Prior-Palmer, Brig. O. L. Taylor, William (Bradford, N.) TELLERS FOR THE NOES:
Raikes, Sir Victor Teeling, W. Mr. Legh and
Ramsden, J. E. Temple, J, M. Colonel J. H. Harrison.

8.0 p.m.

Mr. Bottomley

I beg to move, in page 2, line 10, at the end to add: (2) This section shall not have effect in relation to any hydrocarbon oil used as or forming a component of or an ingredient in the manufacture or preparation of any article. The Financial Secretary, earlier, tried to create some difficulties on this side of the Committee by suggesting that we had not very strong reasons for advocating our Amendments, and indicated that one hon. Member on this side inferred that his Amendment was stronger than a previous one. The general view of this side of the Committee is that it would have been much better if this wretched petrol tax had not been imposed. We voted against it, but now that it has been imposed we are trying to persuade the Government to accept Amendments which we think will have beneficial results, in particular for industry.

I was rather disappointed that the Financial Secretary did not take more seriously what I was saying earlier. I think it is quite true that many of these proposals would not affect a large part of industry, but they would affect the parts which are most efficient and most able to help our country's economy. It is usually the efficient organisations which export to the dollar markets, and it is those which use derv. This Amendment concerns those which use white spirit, and they will suffer especially as a result of the imposition of this additional tax.

Both the Financial Secretary and the Economic Secretary have made play today with statistics. The statistics which have been given by the Government during the last few days, if they prove anything at all, prove that it is of little advantage to put on the tax because, they say, it will not hurt anybody. If it is not going to hurt anybody, how will it achieve what is said to be part, at least, of its purpose? However, most people who have taxes imposed on them shout very loudly against them, and I am sure that that will be the case with this tax.

I was talking to some friends about the Olympic Games, and that conversation illustrates how one can be misled by statistics. They were saying that not many people could have gone to the Games from the United Kingdom because Australia was a long way off and it was a costly business to get there. "I do not know," I said. "Four people have gone from my own home town, and if that should be the average number to go from an area of so many people then some thousands must have gone from the country as a whole." I am inclined to think that the Financial Secretary has worked out his statistics relating to this tax in rather the same way. In this case, it really will not do.

I must ask the Economic Secretary to consider seriously whether the tax was necessary. He will be aware that originally the tax was 4d., which the industries affected by it probably could absorb at that time, although I think that stronger objection to it could well have been taken. Now it is 3s. 6d. It is a tax on raw material for those industries, and there are many of them.

I was listening-in this morning to a broadcast to schools. The lecturer was talking about the difficulties caused by the shortage of oil and petrol. He said that it would take him half an hour to enumerate the industries which will be affected by the petrol shortage. I will put it briefly, that the industries which are affected by the imposition of this tax are the cellulose lacquer industry; the plastics industry, which is a key industry in the nation's economy; the polish industry, which I know, because of my experience at the Board of Trade, provides valuable exports of boot and shoe polish; glue; linoleum; the paint industry; the seed crushing industry; the resin industry. If I wanted to cite more of them I could do so. They are examples of the industries which will find it more difficult to compete with foreign competitors because of the imposition of this tax burden.

They have an association, and it has made representations to the Treasury, and it has been backed by the Federation of British Industries and the National Union of Manufacturers. I should have thought that that fact would have appealed to the Economic Secretary. I hope that he will not say that he does not consider their representations to be so strong, now that they are not as formidable as when they were his friends, just because they are supporting this Labour Party Amendment to try to save those industries an additional cost estimated to be about £14 million, £4 million up on what it was before.

I am very glad that hydrocarbon oils used in industry generally are exempt from the tax. What I cannot understand is why, if the Government exempt heavy hydrocarbon oils for industry, they cannot apply the same arguments as they use for that exemption to exemption of the tax on the lighter oils used by industry. In my judgment, it is necessary to grant the same concession to the industries which use the light oils if we are to be logical in our treatment of industry.

I know that the Economic Secretary on this occasion, as the Financial Secretary did on another, will say that it is very difficult because there could be abuses in the use of these light oils if the tax were taken off. I gather that the Industrial Light Oils Committee, which represents the industries which use these light oils, has presented the Treasury with suggestions which would forestall such abuses. I have the details of them, but to save the time of the Committee I shall not now go into them. The Treasury knows them, and I would ask the Government to consider those representations seriously.

The Government are penalising a sector of industry by the devious means of imposing a purchase tax, and an extremely heavy purchase tax. If those industries are to be taxed especially, they should be taxed in the proper way, not by means of this additional duty on light oils. I am concerned about the effect that the tax will have on industry generally and on exports in particular. That is my sole reason for making the representations that I have made from this Bench.

My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) is much more competent to speak upon some aspects of this matter than many of us in this Committee, for he has great knowledge and experience of the subject, but, having the concern I have had for so long with industry, I thought it right to make these representations on behalf of industry, and I hope that the Economic Secretary will agree that this additional tax ought not to be imposed on these industries and will accept the Amendment.

Mr. J. Taylor

This is a particularly unfortunate tax, for it is an additional burden on industry. I do not think "vicious" would be too strong a word to use to describe it. This is an extra tax of £4 million on the raw materials used in manufacturing, and to tax those is a very bad principle in taxation, and only a very difficult situation indeed for the nation could justify it. Even though we are in a difficult position now, it seems to me to be very unfair to the industries which use these raw materials to put this additional tax on hydrocarbon oils.

There is not only the consideration that it puts an extra cost of £4 million on the products of these industries. There is the additional consideration which Ministers should have in mind that a number of the products of these industries are subject also to Purchase Tax, so that there will be double taxation on the finished manufactured articles, and that is exceedingly unjust, and out of all proportion to taxation generally. A very large proportion of these goods are exported and are not subject to Purchase Tax. A very wide range of the industries which use this raw material of white spirit have been especially helpful to the country's export drive.

Many of those industries are struggling to maintain their level of exports in the face of violent competition. For instance, more than 50 per cent. of the linoleum produced in the United Kingdom comes from Kirkcaldy. The extent of the export proportion of the Kirkcaldy linoleum industry has been increasing in face of great difficulties, because its raw materials, particularly linseed oil, were frequently in short supply during and immediately after the war. However, since that difficulty has been overcome, our exports of linoleum to the United States and Canada have been considerable. Those exports have been held, in the face of acute competition, because the price differential between Kirkcaldy linoleum and that of its competitors has been a matter of pence. This additional tax will, therefore, make all the difference, not only to that industry but to others which must be similarly affected.

The Economic Secretary may tell us that arrangements are being made for a drawback in this tax. There is force in that argument as applied to high-priced articles, but many articles in which white spirit is used are low-priced, and the administrative and book-keeping costs involved in arranging the drawback are so high in some cases that the drawback procedure has been largely jettisoned in the case of low-priced articles costing 1s. or 2s.—for instance, a half-pint tin of paint—because it does not pay the industries to use the procedure.

This is the only country in the world, so far as I know, which has refused any tax remission for this raw material during post-war years. Weighing up all the considerations, the wide range of industries using this raw material are entitled to ask, even for this temporary period, that this additional burden should not be placed upon one of their most valuable raw materials.

8.15 p.m.

Mr. Pryde

I am very apprehensive about the present situation. When the recent incidents happened in the Middle East I knew that the country's economy would suffer a great set-back, but I did not expect the Government to pursue the policy that they are now pursuing by means of this projected legislation. They are now assuming the attitude of the hatchet men. They are using the hatchet to strike a vital blow at every section of the people, especially the working class.

This is a most vicious tax, as was indicated by my hon. Friend the Member for West Lothian (Mr. J. Taylor). It strikes at the very roots of our society. I can visualise coming from Hull the ingredients which employ thousands of men in the great paint shops of George Street, Edinburgh, of Craig and Rose, and of Leith, and of Glasgow. There is a very likely chance of there being a large number of unemployed when this tax becomes effective, because white spirit enters into industry to a far greater extent than is dreamed of by those who framed this legislation.

My right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) spoke of some of the industries using white spirit. Hull is one of the towns which, I fear, will stage a revolt, because its life depends upon white spirit. Every municipality in Scotland will suffer considerably from the effect of this tax. Let us take housing. At present, the Government are in a fix about housing; they have completely altered their policy upon it. In my own constituency there is one burgh which owns 75 per cent. of the houses and another owns nearly as many. In fact, the county of Midlothian has a splendid housing record. White spirit is required for the redecorating of those houses. The bone of contention in housing has always been maintenance. If this extra tax is added the difficulty will be greater than ever, and all the housing revenue accounts in the country will suffer accordingly.

More than anything else this tax will reduce the supply of raw materials and thus more and more unemployment must be created. I ask the Government seriously to consider this position. Their economists must be very different from ours. Ours are practical economists, working in industry, and the great industry in Kirkcaldy is a case in point. Practically all the concerns are still family businesses. Some people have said that the industry can be regarded as a luxury one, but painting and decorating is no more a luxury than is a visit to the barber to get a shave or a haircut. It may have been all right fifty, sixty or a hundred years ago for people to make do when moving into a house, but today our young people like to see their houses well decorated. If houses are not well kept, some municipalities take action. White spirit haunts decorating like a ghost.

I appeal to the Government to reconsider the matter. Otherwise, my previous charge must stand, that they must be regarded as the hatchet men, just as we regarded a previous Tory Government as the hard faced men.

Mr. Sydney Silverman (Nelson and Colne)

I am hoping that the Government may be able to accept this Amendment, and it is difficult to see why they should not do so. During the Second Reading debate the Minister gave two reasons for imposing the tax, and it would be interesting to try to apply those reasons to any reluctance to accept this Amendment. There must be considerable reluctance to reject it. The evidence of Government enthusiasm for the Measure at the moment is really remarkable.

Mr. Charles Grey (Durham)

Stronger than it has been.

Mr. Silverman

It is stronger than it was even a minute or two ago. If the rules of procedure permitted, and you could call a Division, Sir Charles, and then lock the doors so that only those hon. Members who had heard the argument would be permitted to decide the issue, the Government would be defeated in the proportion of five to one.

Perhaps there are so few Government supporters opposite because they really cannot bring themselves to sit quietly on the benches listening to the Government rejecting so serious and reasonable an Amendment as this one. Since they are bound by one of the pressures, to which one of their hon. Friends referred the other day, to vote for the Government anyway, it seems that they would prefer to do it in ignorance. Apparently it is better to vote blind on the basis of keeping the Government in office as long as possible, however short that time may be, than to be compelled to listen to the arguments and make an assessment of the merits.

The first reason given by the Minister for the imposition of this tax was that the Government needed the money, and if they did not get it this way they would have to obtain it some other way. The second reason that he gave was that he wanted to discourage people from using the moderate amount of these oils which were permitted them under the ration. He did not pause to explain how, if he succeeded in the one object, he was to succeed in the other. In the proportion that he succeeds in his object of reducing the amount of oil consumed, he defeats the object of raising the revenue. Therefore, we have two reasons for the Bill which completely cancel one another out in the sense, at any rate, that the Minister cannot have both.

Is the Economic Secretary to the Treasury going to advise the Committee to reject the Amendment, which is directed to exempting from the tax hydrocarbon oils that are used as a component or ingredient in the manufacture or preparation of other articles; in other words, any oil that is used for a creative or productive purpose? That is clearly the intention. Do the Government want to increase the revenue or reduce the amount of goods produced? Do they want to reduce the amount of oil used in producing goods, or do they want to retain the money? Which of these conflicting reasons apply to the objection to the Amendment?

This does not seem to me to be one of the cases in which the Government should follow a course designed to reduce production, yet that must be the effect if the Government's purpose in the whole Measure and in this matter is to reduce the amount of oil consumed. This is a very good Amendment on which the Government should make another attempt to explain what so far has proved inexplicable, namely, the reasons which have prompted the Government to add a further cost to the cost of production.

Mr. Walker-Smith

I am sorry that the hon. Member for Nelson and Colne (Mr. S. Silverman), who so often engages the attention of the Committee and of the House, had fewer hon. Members on this side of the Committee listening to him than is customary when he speaks, but I assure him that what they lacked in quantity they made up in quality. I am not referring to myself, of course. I hope that hon. Members opposite have known me long enough to assume that. As to the attitude of my hon. Friends, they have given their earnest and careful consideration to this matter, of course, and I am sure that they have a good appreciation of the justness of the Government's case. The hon. Member for Nelson and Colne referred to a hypothetical Division that might take place. I could not help but observe that when he said that the eyes of one of his hon. Friends were tightly closed, no doubt with the intensity of his concentration, but I wondered how he would count in the Division.

The debate has touched upon matters to which hon. Members are no strangers, because this is a subject that arises from time to time in Finance Bill debates. I should start, perhaps, by referring to the scope and effect of the Amendment. The wording, I think, is taken from Section 2 of the Finance Act, 1928, and, therefore, has a very respectable authorship as precedent, but I am not sure whether it is apt to do all that the right hon. Member for Rochester and Chatham (Mr. Bottomley) and his hon. Friends evidently thought that it does, or at any rate hoped that it does.

The wording of the Amendment would include certainly oil used in making paints and polishes, printers' inks, weed killers, and perhaps others of the examples given by the right hon. Member, but it is at least doubtful whether it would include oil used merely as a solvent in the manufacture of products like linoleum, to which reference was made from the benches opposite. Linoleum is not brought in under the wording of the Finance Act, 1928. Certainly, there are some processes that would not be included, such as the use of this oil or white spirit in processes where, in a sense, there is an industrial process but no article is actually made, such as dry-cleaning.

Mr. Bottomley

This is encouraging. Is it the Government's intention on Report to include them? It looks as if we are to have the Amendment.

8.30 p.m.

Mr. Walker-Smith

No, I am saying that even though the wording is not apt to include things like linoleum, I gather from the tenor of the debate, and particularly from the references made by the hon. Member for West Lothian (Mr. J. Taylor) and the hon. Member for Midlothian (Mr. Pryde), that it is the intention that the Amendment should extend to those sorts of products.

In any event, the form of the Amendment is wrong in that in these matters relief cannot be achieved by a direct exemption as to category of use. This is because the oil is duty-paid on leaving the oil companies' and producers' bonded stores. If effect were to be given to the principle which I understand underlies the Amendment, the users would have to continue to buy the oil duty-paid, and any provision for relief would have to be by way of a scheme for repayment. Therefore, although the wording is not apt to produce the result which is intended, we can, of course, debate the principle which I understand lies behind the Amendment.

With regard to the cost, the exemption from the 1s. increase in duty in the terms of the Amendment, but also taking in the things which I apprehend the Amendment is designed to include, would be at the annual rate of £4 million. If acceptance of this principle led, however, to acquiescence in the wider principle, which has often been pressed in Finance Bill debates, of the exemption from this duty of all oil used other than for road fuel purposes, which would be the next step to be pressed, then there would be a loss at an annual rate of no less than £10 million.

The right hon. Gentleman and other hon. Gentlemen opposite who have spoken went back to first principles and attacked the basis of the tax, arguing that it was a tax on the raw material of industry, and they took exception not only to the 1s. increase but to the root principle of taxing this type of light oil at all. The answer to that lies fairly deeply rooted in history, because it is a fact and a matter of history that the hydrocarbon oil duty has always been intended as a general Revenue duty on all light oils, with no exceptions for special classes of user.

This is the principle which has operated from the very beginning, since 1928; it has remained the principle under Governments of differing political complexions during a quarter of a century and more. Indeed, the only exceptions which were made in the early days of the tax were those in respect of lifeboats and British fishing boats as being quite exceptional cases, and it was then made clear—the House accepted it at that time—that the concessions made in those early stages were not to be used as a springboard for further concessions but were specific concessions limited to a narrow sphere.

Mr. S. Silverman

Will the hon. and learned Gentleman consider whether it would be possible to serve the same purpose by an indirect and rather novel route? I suggest the Government might consider the formation of a hydrocarbon oils users' association, which would decide exactly how much oil was necessary, obtain it by going and taking it, and collect the dues for it from the consumers, who would pay them to the association, and the association would then decide how much the Chancellor of the Exchequer ought to have out of the proceeds.

Mr. Walker-Smith

That is fresh evidence, if fresh evidence were needed, that the ingenuity of the hon. Gentleman is inexhaustible, but I do not think that I ought to follow him into such hypothetical matters.

I want to return to a point which may be a little inconvenient to the hon. Member. Hon. Gentlemen opposite have described the principle of the tax in strong terms. They have said that it is a vicious tax and that it is wrong in principle to tax the raw material of industry. However, as I have made clear, this has now been the principle for a quarter of a century or more under successive Governments.

Mr. Gordon Walker

That makes it worse.

Mr. Walker-Smith

The right hon. Gentleman says that it makes it worse. He and his right hon. Friend the Member for Rochester and Chatham were members of the Labour Administration in 1950 and 1951 when the hydrocarbon oil duty was raised. No exception was then made in respect of the industrial light oils. No deviation was made from the principle to which I have referred.

Mr. Gordon Walker

If that were an offence, which it might be, it is surely a much greater offence the higher one raises the duty. Our objection now is that it is becoming a much greater offence.

Mr. Walker-Smith

The Committee is sophisticated enough to be able to judge whether it is the rate of duty or the arrangement of Members on the benches which has most influence in the right hon. Gentleman's mind.

The hon. Member for Midlothian was here at that time, as was the hon. Member for Nelson and Colne. I appreciate that the hon. Member for West Lothian was not here, but at that time he held an office of great influence as Scottish Secretary of the Labour Party, so he, too, must be taken to have acquiesced in this principle.

Mr. Pryde

If because of this tax a miner in Midlothian has to pay more for the redecoration of his house, I take it that the Economic Secretary will be generous enough to allow that that miner will require a rise in wages—as will every other section of the working classes accordingly.

Mr. Walker-Smith

No, because, as I said yesterday when dealing with Questions relating to the impact on the cost of living of the whole of the petrol duty increase and the increase in commercial prices, there will be an increase of only half of one point in the cost of living. We should not exaggerate the effects on the cost of living of this very small Measure.

Mr. Norman Dodds (Erith and Crayford)

Does the hon. and learned Member not appreciate that there was no hon. Member opposite who really believed that? They all had pained expressions.

Mr. Walker-Smith

The hon. Member is not entitled to write into HANSARD a record of the facial expressions of hon. Members. We can record only the spoken word.

It is, therefore, the fact that the attacks on the principle come too late. This is a Revenue duty which has always been operated on this basis, and properly operated on this basis. The earliest tax, the old motor spirit duty starting from 1909, collapsed, because it allowed the principle of exemptions for special classes of users and became impossible to administer for that reason. It is not right to say that this is a vicious tax, and it is not right to say that it is a tax which has arisen only by accident. It has always been in this form. Were the principle of the Amendment accepted, the next step would be the exemption of all other non-road fuel uses at a rate of £10 million a year.

Mr. Bottomley

The hon. and learned Member is an extremely capable debater, but he will be aware that it was the Labour Government which removed the duty on heavy oil. We were in extreme economic difficulties and further taxation reliefs necessarily could not take place. I urge the hon. and learned Member to consider that the tax could have been reduced in the course of the "sunshine" Budget last year. What we are now arguing is that this further imposition of 1s. is a vicious tax.

Mr. Walker-Smith

The right hon. Gentleman referred to economic difficulties. We are considering the Bill in the context of the economic difficulties imposed by Colonel Nasser's seizure of the Canal.

The right hon. Gentleman referred to the important matter of exports. It is, of course, essential to our balance of payments position that we take no action which will prejudice our export trade. Indeed, the reverse is the case, but there is no question of imposing burdens on the exporting part of the industry, because there is provision for a drawback on the amount of oil used in the manufacture or preparation of exported goods.

The rates of drawback will automatically be increased on goods made from oil duty-paid at the increased rates. That is simply a matter of arithmetic—of the application of an increased drawback proportionate to the increased duty. That being so, I think that hon. Members will appreciate that in this case we have merely followed a principle which has had the sanction of Parliament through the period of office of various Governments for all these years; and, in doing so, we have been careful to safeguard the position of the exporting part of the industry. In those circumstances I hope that the Committee will feel that this is not an Amendment which need be pressed, and if it is I hope that the Committee will have the wisdom to reject it.

Mr. A. E. Cooper (Ilford, South)

I do not wish to embarrass my hon. and learned Friend, but I must say that he has done his best to make bricks without straw in arguing against the Amendment. I am directly concerned in an industry which uses these light hydrocarbon oils and which is severely penalised as a result of this action. I rise only to emphasise what has been emphasised in the House for the last twenty-five years, year in and year out, namely, that this tax upon industry was accidental. It was never intended in the 1928 Act.

The fact that we are increasing the rate of duty now makes the action no better than it was when hon. Members opposite increased the duty when their party formed the Government. Hon. Members opposite, including the hon. Member for Nelson and Colne (Mr. S. Silverman) voted against Amendments which we put forward, from 1946 onwards, to reduce the duty. My hon. and learned Friend himself voted with us when we were in opposition.

Mr. S. Silverman

Does the hon. Member not appreciate the difference between raising the price of petrol by a tax of 9d., from 2s. 3d. to 3s. a gallon—leaving it still the cheapest petrol in Europe, and raising it, seven or eight years later, until the price reaches more than 6s. per gallon and becomes the dearest petrol in Europe? Is there no difference?

Mr. Cooper

I have opposed this tax during my seven years in the House, whether I have been sitting on that side or this side. I believe that it is a wrong tax, which is detrimental to the interests of British industry. It is no use the hon. Member for Enfield, East (Mr. Ernest Davies) and the right hon. Member for Rochester and Chatham (Mr. Bottomley) speaking as they do now. They rejected this sort of Amendment when they were members of a Socialist Government.

This is a matter which cuts right across party lines. We really must decide whether or not the duty on light hydrocarbon oils should affect our industrial production. That is the simple issue. If hon. Members opposite formed the Government of the day I believe that they would resist the Amendment as my hon. and learned Friend has done. [HON. MEMBERS: "Oh] It is no use hon. Members opposite getting upset about this. We have the record of six years to guide us. For six years in a row we put down Amendments based on this very principle, and they opposed us. For that reason I say that this is an issue which cuts across party lines. The Treasury must make up its mind, between now and the Budget, whether industry is to be penalised in this way.

As my hon. and learned Friend has said, it is true that the export industry receives a drawback which puts it in no worse position than it would be in if the duty had not been levied. But I would ask my hon. and learned Friend to consider what those in the export industry

have to do to obtain this drawback. Many thousands of pounds have to be spent by industry to satisfy the Treasury that it is entitled to this drawback.

I wish to emphasise the point which I made on Monday, that no allowance is made at all for any losses which may take place in manufacturing. I would also emphasise once again that there is no country in Western Europe which is saddled with this burden on light hydrocarbon oils. This burden was imposed on industry in 1928 by accident, and I beg my hon. and learned Friend not to confuse age with respectability.

Question put, That those words be there added:—

The Committee divided: Ayes 184, Noes 230.

Division No. 27.] AYES [8.45 p.m.
Ainsley, J. W. Forman, J. C. Mallalieu, E. L. (Brigg)
Allaun, Frank (Salford, E.) Fraser, Thomas (Hamilton) Mann, Mrs. Jean
Allen, Arthur (Bosworth) Gordon Walker, Rt. Hon. P. C. Marquand, Rt. Hon. H. A.
Allen, Scholefield (Crewe) Greenwood, Anthony Mason, Roy
Anderson, Frank Grey, C. F. Mayhew, C. P.
Awbery, S. S. Griffiths, David (Bother Valley) Mellish, R. J.
Bacon, Miss Alice Griffiths, Rt. Hon. James (Llanelly) Messer, Sir F.
Balfour, A. Hale, Leslie Mikardo, Ian
Bence, C. R. (Dunbartonshire, E.) Hall, Rt. Hn. Glenvil (Colne Valley) Mitchison, G. R.
Benson, G. Hamilton, W. W. Monslow, W.
Blackburn, F. Hannan, W. Moody, A. S.
Blenklnsop, A. Harrison, J. (Nottingham, N.) Morris, Percy (Swansea, W.)
Blyton, W. R. Hastings, S. Mort, D. L.
Boardman, H. Hayman, F. H. Moss, R.
Bottomley, Rt. Hon. A. C. Herbison, Miss M. Moyle, A.
Bowden, H. W. (Leicester, S.W.) Hobson, C. R. Mulley, F. W.
Braddock, Mrs. Elizabeth Holman, P. Neal, Harold (Bolsover)
Brock way, A. F. Holmes, Horace Oliver, G. H.
Broughton, Dr. A. D. D. Howell, Charles (Perry Barr) Oram, A. E.
Brown, Thomas (Ince) Hughes, Cledwyn (Anglesey) Orbach, M.
Burke, W. A. Hughes, Emrys (S. Ayrshire) Owen, W. J.
Burton, Miss F. E. Hunter, A, E. Paling, Rt. Hon. W. (Dearne Valley)
Callaghan, L. J. Hynd, J. B. (Attercliffe) Palmer. A. M. F.
Castle, Mrs. B. A. Irvine, A. J. (Edge Hill) Pannell, Charles (Leeds, W.)
Champion, A. J. Irving, S. (Dartford) Pargiter, G. A.
Chapman, W. D. Isaacs, Rt. Hon. G. A. Parker, J.
Chetwynd, G. R. Jay, Rt. Hon. D. P. T. Parkin, B. T.
Clunie, J. Jeger, Mrs. Lena(Holbn & St. Pnos, S.) Paton, John
Coldrick, W. Johnson, James (Rugby) Pentland, N.
Collick, P. H. (Birkenhead) Jones, Rt. Hon. A. Creech (Wakefield) Price, J. T. (Westhoughton)
Corbet, Mrs. Freda Jones, Jack (Rotherham) Price, Philips (Gloucestershire. W.)
Craddock, George (Bradford, S.) Jones, J. Idwal (Wrexham) Probert, A. R.
Cronin, J. D. Proctor, W T.
Cullen, Mrs. A. Jones, T. W. (Merioneth) Pryde, D. J.
Davies, Ernest (Enfield, E.) King, Dr. H. M. Randall, H. E.
Davies, Harold (Leek) Lawson, G. M. Rankin, John
Davies, Stephen (Merthyr) Lee, Frederick (Newton) Redhead, E. C.
Deer, G. Lever, Leslie (Ardwick) Reeves, J.
Delargy, H. J. Lewis, Arthur Reid, William
Dodds, N. N. Logan, D. G. Roberts, Albert (Normanton)
Donnelly, D. L. Mabon, Dr. J. Dickson Roberts, Goronwy (Caernarvon)
Dugdale, Rt. Hn. John (W. Brmwch) MacColl, J. E. Robinson, Kenneth (St. Pancras, N.)
Edwards, Rt. Hon. John (Brighouse) McGhee, H. G. Ross, William
Edwards, Rt. Hon. Ness (Caerphilly) McInnes, J. Royle, C.
Edwards, Robert (Bilston) McKay, John (Wallsend) Short, E. W.
Edwards, W. J. (Stepney) McLeavy, Frank Shurmer, P. L. E.
Evans, Albert (Islington, S. W.) MacMillan, M. K. (Western Isles) Silverman, Sydney (Nelson)
Fernyhough, E. MacPherson, Malcolm (Stirling) Skeffington, A. M.
Flenburgh, W. Mahon, Simon Slater, Mrs. H. (Stoke, N.)
Fletcher, Eric Mainwaring, W. H. Slater, J. (Sedgefield)
Smith, Ellis (Stoke, S.) Tomney, F. Williams, Rev. Llywelyn (Ab'tillery)
Sorensen, R. W. Viant, S. P. Williams, Ronald (Wigan)
Soskice, Rt. Hon. Sir Frank Warbey, W. N. Williams, Rt. Hon. T. (Don Valley)
Sparks, J. A. Watkins, T. E. Williams, W. R. (Openshaw)
Steele, T. Weitzman, D. Willis, Eustace (Edinburgh, E.)
Stewart, Michael (Fulham) Wells, Percy (Faversham) Wilson, Rt. Hon. Harold (Huyton)
Stones, W. (Consett) Wells, William (Walsall, N.) Winterbottom, Richard
Summerskill, Rt. Hon. E. West, D. G. Woof, R. E.
Sylvester, G. O. Wheeldon, W. E. Yates, V. (Ladywood)
Taylor, John (West Lothian) White, Henry (Derbyshire, N. E.)
Thomas, George (Cardiff) Wilcock, Group Capt. C. A. B. TELLERS FOR THE AYES:
Thomas, Iorwerth (Rhondda, W.) Wilkins, W. A. Mr. Pearson and Mr. Simmons.
Timmons, J. Williams, David (Neath)
NOES
Agnew, Cmdr. P, G. Gresham Cooke, R. Macmillan, Maurice (Halifax)
Aitken, W. T. Grimston, Sir Robert (Westbury) Macpherson, Niall (Dumfries)
Allan, R. A. (Paddington, S.) Grosvenor, Lt.-Col. R. G. Maddan, Martin
Alport, C. O. M. Gurden, Harold Maitland, Cdr. J. F. W. (Horncastle)
Amery, Julian (Preston, N.) Hall, John (Wycombe) Maitland, Hon. Patrick (Lanark)
Amory, Rt. Hn. Heathcoat (Tiverton) Harris, Frederic (Croydon, N. W.) Manningham-Buller, Rt. Hn. Sir R.
Arbuthnot, John Harris, Reader (Heston) Markham, Major Sir Frank
Armstrong, C. W. Harrison, A. B. C. (Maldon) Marlowe, A. A. H.
Ashton, H. Harrison, Col. J. H. (Eye) Marples, A. E.
Atkins, H. E. Harvey, Ian (Harrow, E.) Marshall, Douglas
Baldwin, A. E. Harvey, John (Walthamstow, E.) Mathew, R.
Balniel, Lord Harvie-Watt, Sir George Maude, Angus
Barber, Anthony Heald, Rt. Hon. Sir Lionel Maudling, Rt. Hon. R.
Barlow, Sir John Heath, Rt. Hon. E. R. G. Maydon, Lt.-Comdr, S. L. C.
Baxter, Sir Beverley Henderson, John (Cathcart) Molson, Rt. Hon. Hugh
Beamish, Maj. Tufton Hesketh, R. F. Mott-Radclyffe, C. E.
Bell, Philip (Bolton, E.) Hicks-Beach, Maj. W. W. Nabarro, G. D. N.
Bennett, F. M. (Torquay) Hill, Rt. Hon. Charles (Luton) Neave, Airey
Birch, Rt. Hon. Nigel Hill, Mrs. E. (Wythenshawe) Nicholls, Harmer
Bishop, F. P. Hirst, Geoffrey Nicholson, Godfrey (Farnham)
Body, R. F. Holland-Martin, C. J. Nicolson, N. (B'n'm'th, & Chr'ch)
Bossom, Sir Alfred Holt, A. F. Nugent, G. R. H.
Boyd-Carpenter, Rt. Hon. J. A. Hornby, R. P. Oakshott, H. D.
Brooke, Rt. Hon. Henry Howard, Hon. Greville (St. Ives) O'Neill, Hn. Phelim (Co. Antrim, N.)
Browne, J. Nixon (Craigton) Howard, John (Test) Osborne, C.
Bullus, Wing Commander E. E. Hughes Hallett, Vice-Admiral J. Page, R. G.
Burden, F. F. A. Hutchison, Sir Ian Clark (E'b'gh, W.) Pannell, N. A. (Kirkdale)
Butcher, Sir Herbert Hyde, Montgomery Partridge, E.
Butler, Rt. Hn. R. A.(Saffron Walden) Hylton-Foster, Sir H. B. H. Peyton, J. W. W.
Campbell, Sir David Iremonger, T. L. Pilkington, Capt. R. A.
Carr, Robert Irvine, Bryant Godman (Rye) Pitt, Miss E. M.
Cary, Sir Robert Jennings, J. C. (Burton) Pott, H. P.
Chichester-Clark, R. Jennings, Sir Roland (Hallam) Powell, J. Enoch
Clarke, Brig. Terence (Portsmth, W.) Johnson, Dr. Donald (Carlisle) Price, David (Eastleigh)
Conant, Maj. Sir Roger Johnson, Eric (Blackley) Prior-Palmer, Brig. O. L.
Cooper, A. E. Joseph, Sir Keith Raikes, Sir Victor
Cooper-Key, E. M. Joynson-Hicks, Hon. Sir Lancelot Ramsden, J. E.
Cordeaux, Lt.-Col. J. K. Kaberry, D. Rawlinson, Peter
Corfield, Capt. F. V. Keegan, D. Redmayne, M.
Craddock, Beresford (Spelthorne) Kerby, Capt. H. B. Rees-Davies, W. R.
Crowder, Petre (Ruislip—Northwood) Kerr, H. W. Renton, D. L. M.
Cunningham, Knox Kershaw, J. A. Ridsdale, J. E.
Currie, G. B. H. Kimball, M. Rippon, A. G. F.
Davidson, Viscountess Lagden, G. W. Robinson, Sir Roland (Blackpool, S.)
Deedes, W. F. Lambert, Hon, G. Roper, Sir Harold
Digby, Simon Wingfield Lambton, Viscount Ropner, Col. Sir Leonard
Donaldson, Cmdr. C. E. McA. Lancaster, Col. C. G. Russell, R. S.
Doughty, C. J. A.
Drayson, G. B. Leavey, J. A. Schofield, Lt.-Col. W.
du Cann, E. D. L. Legge-Bourke, Maj. E. A. H. Scott-Miller, Cmdr. R.
Dugdale, Rt. Hn. Sir T. (Richmond) Legh, Hon. Peter (Petersfield) Sharples, R. C.
Duncan, Capt. J. A. L. Lindsay, Hon. James (Devon, N.) Shepherd, William
Duthie, W. S. Lindsay, Martin (Solihull) Smithers, Peter (Winchester)
Eden, J. B. (Bournemouth, West) Linstead, Sir H. N. Spearman, Sir Alexander
Emmet, Hon. Mrs. Evelyn Llewellyn, D. T. Speir, R. M.
Errington, Sir Eric Lloyd, Maj. Sir Guy (Renfrew, E.) Stanley, Capt. Hon. Richard
Farey-Jones, F. W. Lloyd-George, Maj. Rt. Hon. G. Stevens, Geoffrey
Fisher, Nigel Longden, Gilbert Steward, Harold (Stockport, S.)
Freeth, D. K. Lucas, Sir Jocelyn (Portsmouth, S.) Stewart, Henderson (Fife, E.)
Galbraith, Rt. Hon. T. G. D. Lucas, P. B. (Brentford & Chiswick) Stoddart-Scottt, Col. M.
Garner-Evans, E. H. Lucas-Tooth, Sir Hugh Storey, S.
George, J. C. (Pollok) McAdden, S. J. Studholme, Sir Henry
Gibson-Watt, D. McCallum, Major Sir Duncan Sumner, W. D. M. (Orpington)
Glover, D. Macdonald, Sir Peter Taylor, William (Bradford, N.)
Godber, J. B. McKibbin, A. J. Teeling, W.
Gower, H. R. Mackie, J. H. (Galloway) Temple, J. M.
Graham, Sir Fergus MacLean, Fitzroy (Lancaster) Thomas, Leslie (Canterbury)
Grant-Ferris, Wg Cdr. R. (Nantwich) McLean, Neil (Inverness) Thompson, Kenneth (Walton)
Green, A. MacLeod, John (Ross & Cromarty) Thompson, Lt.-Cdr. R. (Croydon, S.)
Thorneycroft, Rt. Hon. P. Wakefield, Sir Waved (St. M'lebone) Williams, Paul (Sunderland, S.)
Tiley, A. (Bradford, W.) Walker-Smith, D. C. Williams, R. Dudley (Exeter)
Tilney, John (Wavertree) Wall, Major Patrick Wills, G. (Bridgwater)
Turner, H. F. L. Ward, Hon. George (Worcester) Wilson, Geoffrey (Truro)
Turton, Rt. Hon. R. H. Ward, Dame Irene (Tynemouth) Wood, Hon. R.
Vaughan-Morgan, J. K. Waterhouse, Capt. Rt. Hon. C.
Vickers, Miss J. H. Watkinson, Rt. Hon. Harold TELLERS FOR THE NOES:
Vosper, D. F. Webbe, Sir H. Mr. Bryan and
Wakefield, Edward (Derbyshire, W.) Whitelaw, W. S. I. (Penrith & Border) Mr. Hughes-Young.
Mr. Gordon Walker

I beg to move, in page 2, line 10, at the end to add: (2) This section shall cease to have effect on the fifth day of April, 1957. This Amendment would have the effect of making the provisions of the Bill come to an end with the end of the financial year on 5th April next.

The Temporary Chairman (Major Sir William Anstruther-Gray)

Order, think it would be for the convenience of the Committee if, with this Amendment, we also discuss the Amendment in Clause 2, page 3, line 24, in the name of the hon. Member for Peckham (Mrs. Corbet) after "subsection" to insert: to continue to charge for a period of three months or less the fares chargeable by virtue of the foregoing provisions of this section".

Mr. Gordon Walker

Thank you, Sir William. Although there is some relationship between the two Amendments, the second refers to a different point, which I do not doubt that my hon. Friend the Member for Peckham (Mrs. Corbet) will bring out. I wish to address my remarks to the first Amendment.

We are trying to do the Chancellor a service. The right hon. Gentleman has been emphatic that this is a temporary Measure, and we wish to offer him an opportunity to make crystal clear and beyond the doubt of anybody that it is. The right hon. Gentleman said he drew the Bill in this rather special way to emphasise that this was a temporary Measure. The acceptance of this Amendment would not make it more especially drawn, but would make very much clearer that this is a temporary Bill than does the present wording.

On Monday, the Chancellor said that he hoped the Bill would come to an end in four or five months. It is for that reason that we have been led to produce this date. If the right hon. Gentleman would like to suggest any other date within a reasonable reach of this one, we should be willing to consider it, and, on Report, to agree to the insertion of some other date, such as the end of May, if it were felt that it would be nearer five months than four before the Bill came to an end; the Chancellor did say four or five months.

We are also giving a opportunity to a number of hon. Gentlemen opposite who particularly stressed this point during the Second Reading debate. They include the lion. Member for Withington (Sir R. Cary), who said clearly that a date should be written into the Bill. I hope that he will say it again tonight. Other hon. Members included the hon. Member for Croydon, North-West (Mr. F. Harris) the hon. Member for Ilford, South (Mr. Cooper), who is apt to make speeches attacking his own side, although his feet do not follow his voice; the hon. and learned Member for Hove (Mr. Marlowe) and the hon. Member for Kidderminster (Mr. Nabarro). They all said explicitly that this Amendment should be written into the Bill on Committee stage. So we hope that at least five hon. Members opposite will be voting with us; and we shall be surprised if the Chancellor does not do so as well, after the statement he made on this subject.

I am sure that the right hon. Gentleman will argue that this can be done in the Budget in any case. But that is an argument which can be turned the other way round, with rather more effect. If it should be found, after this Amendment had been carried, that it was still necessary to prolong the provisions of the Bill, the Budget would give a proper opportunity for prolonging them as a Clause in the Finance Bill. The Government will not be running a great risk, if they found that some small prolongation was necessary at the end of the financial year. I therefore hope the right hon. Gentleman will not use that argument, because it turns against him instead of being in his favour. There is to be a Budget and a Finance Bill and it would be better to make clear now the intention of the Government to make this Measure completely temporary. If it is necessary for them to alter their minds, let the Government do it with a positive action in the Finance Bill, so that we know exactly where we are. If the right hon. Gentleman would prefer an Amendment proposing that the Bill should come to an end with the end of rationing we should be willing to consider it on Report, and would be prepared to support it in preference to this Amendment.

9.0 p.m.

Sir Robert Cary (Manchester, Withington)

It may come as a slight surprise to the right hon. Member for Smethwick (Mr. Gordon Walker) that I oppose the Amendment in its present form. Of course, I applaud its sentiments, for the reason that the right hon. Gentleman gave. On Second Reading I think I was the first almost to insist that the Chancellor should go out of his way to make this new and unwanted imposition purely temporary, and that he should give an outright affirmation to that effect. I suggested that it should take the form of subjecting the Bill to a six months' Parliamentary authorisation, but that course is clearly too clumsy, and legally is not recommended.

The right hon. Member now brings forward an Amendment suggesting that the terminal date be the end of the financial year, 5th April. The energies of the Government are now applied in the main to resolving the crisis, and they may succeed rather earlier than any of us could hope. Let us say that they succeeded by the beginning of March. Do we want to give the Treasury the opportunity of retaining the power to impose this tax until 5th April or to some date even later? While I applaud the sentiments of the right hon. Gentleman, I think that the Amendment would destroy the intention of the Bill.

To sustain the intention of the Bill must be our first requirement. If we overturn it by producing an Amendment such as this, we destroy in a way the intention of the Chancellor in bringing the Bill before the house. A large number of hon. Members on these Government benches, and who support the Government, want the Bill to be as limited as possible.

I would therefore ask my right hon. Friend whether he would not consider inserting a new subsection in the Clause which will make it quite clear that the duty will be taken off as soon as practicable after the end of the petrol shortage and the rationing scheme. That will link up with the views of the right hon. Member for Smethwick. If that could be done it would go some way to reconcile us to the Bill. No one under-estimates the impact of this Measure on the cost of living.

Mr. Grey

Except the Chancellor.

Sir R. Cary

I know that the Chancellor tried, in regard to bus fares—[Interruption.] He took, as a particular instance, that the present tax would mean less than one-fifth of a point in the price index. We see the incidence of the tax beginning. My directors have to meet in a week's time to consider introducing in a large bus fleet operating in the centre of Lancashire a new imposition on fares which range from 2d. to 11d., and even into the higher ranges. That will have a direct impact upon every constituency in Lancashire.

To cite another example, before we had the imposition of new bus fares there was a price increase of 8d. a ton on coke. For years coke has been kept at an artificially high price level—this is the irony of it—in order to persuade firms to switch from coke burning to oil burning. Now many industries wish that they had not so switched but had their old coke-burning units. Some of my constituents are paying £8 10s. a ton for coke. It is ridiculous; it is not worth £3 10s., and before the war the coalman used to leave a bag of coke as makeweight.

It cannot be to the general nterest of the Chancellor of the Exchequer to sustain a tax, an odious, grievous tax, of this sort. I beg the Financial Secretary to the Treasury to introduce a short subsection to this Clause which will not only give a guarantee to every hon. Member of the Committee that automatically, with the ending of rationing, this tax will be taken off, but—which is more important—that the increase shall be seen by the general public to be temporary.

Mr. Charles Royle (Salford, West)

I wonder if the hon. Baronet would be kind enough to repeat his alternative suggestion? At the moment it seems a little too indefinite, and I should like him to repeat it to the Committee.

Sir R. Cary

Most certainly. I did take considerable time over it. I did not consult the Table Office or the Parliamentary draftsmen, but members of the Committee will have observed that I read it word for word. This is what I had written: I would therefore ask my right hon. Friend if he would not consider inserting a new subsection in this Clause which will make it quite clear that the duty will be taken off as soon as practicable after the end of the petrol shortage and the rationing scheme.

Mr. Royle

That is too indefinite.

Sir R. Cary

With my inexperience of draftsmanship it appeared to me that that would meet the views of the Committee.

Mr. Gordon Walker

I wonder if the hon. Baronet would be prepared to co-operate in putting down an Amendment during the Report stage to the effect that this Bill should come to an end within a certain period—say within two weeks of the end of rationing? I wonder, Sir William, how on earth we can put down Amendments during the Report stage because I do not want to disappoint the hon. Baronet, but we do not know when to put down that Amendment because we do not know what Amendments will be agreed to or defeated in Committee. Could you tell us, Sir William, whether that would be possible?

Mr. Ellis Smith

On a point of order, Sir William. Will you be good enough to look at the Notice Paper in order to assist the Committee in its difficulties? Will you consider accepting a manuscript Amendment? The hon. Member for Withington (Sir R. Cary) and my right hon. Friend the Member for Smethwick (Mr. Gordon Walker) having reasoned with the Committee, would you accept a reasoned Amendment which would assist the Committee?

Mr. H. Brooke

I should like to intervene to see whether I can help the Committee in any way and to respond to the pertinent questions of the right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker). I did not think that it was courteous for me to do so earlier, because I understand that we are discussing with this Amendment an Amendment in the name of the hon. Lady the Member for Peckham (Mrs. Corbet). I felt that it would be churlish of me to rise before the hon. Lady had spoken on that Amendment. If she were to be given an opportunity, at your discretion, Sir William, I would then rise and we could see whether we could carry the matter further.

The Temporary Chairman

I think that the most convenient plan is for the Committee to hear the right hon. Gentleman now. I am sure that the hon. Lady the Member for Peckham (Mrs. Corbet) will agree. If so, I will call her after the point has been dealt with.

Mr. Ellis Smith

I rose on a point of order, Sir William.

The Temporary Chairman

That is what the Minister is dealing with

Mr. Brooke

I hope that I shall be able to give a reasonable degree of satisfaction to the Committee. I say straight away that I could not advise acceptance of the Amendment. My right hon. Friend the Chancellor when he announced this duty, last Tuesday week, and again in his Second Reading speech, two days ago, linked the new duty with the shortage of oil. In his Second Reading speech, he actually said: This is a temporary Measure arising out of the present shortage of oil, and the increase will be applied no longer than is justified on that account." —[OFFICIAL REPORT, 10th December, 1956; Vol. 562. c. 36.] What I think the Committee is seeking is that that statement should be made somewhat more precise.

The reason I could not advise the is Committee to accept the Amendment is that nobody can foresee whether the fifth day of April, 1957, although it is the end of the Income Tax year, will have any particular relationship to the end of petrol rationing. Petrol rationing might end before or after that. To accept the Amendment really would be inconsistent with my right hon. Friend's intention. However, I was very much impressed by the speeches made on Second Reading by a number of my hon. Friends, beginning with my hon. Friend the Member for Withington (Sir R. Cary), when they criticised the fact that there was in the body of the Bill nothing which, as it were, further identified the word "temporary" in the Title with any particular date.

I have been considering the matter and trying to see how the Government could help the Committee on this, because I believe that we are largely at one in what we want to do. I am prepared to advise the Committee to write into the Bill a provision which, while in no way altering the power of the Treasury, by Order, to bring the additional duty to an end at any time, will ensure that, even if the Treasury takes no action at all, the duty will terminate one month after the end of rationing. I have asked for an Amendment to be drafted which would secure that aim.

The Amendment is not quite in the clear, simple and lucid language which I have addressed to the Committee, but I understand that it is in language which would be more fitting to appear in a Statute. Here I am in your hands, Sir William, and in the hands of the Committee. I am prepared to move the Amendment as a manuscript Amendment now if that is acceptable. If, on the other hand, the Committee would rather hold this over until tomorrow, I will table the Amendment tonight and it will appear on the Order Paper for the Report stage.

The Amendment is perfectly simple in its intention. It simply lays down that, whatever action or inaction the Treasury displays meanwhile, the duties imposed under Clause 1 will lapse at the end of one month after the end of rationing. I very much hope that that may generally meet the will of the Committee and, I believe, satisfy public opinion outside, also.

9.15 p.m.

Mr. Ellis Smith

Further to that point of order, Sir William. In the past, it has always been the practice that when a proposal of this character has been made, especially in this form, copies have been available for all hon. Members. We are all as interested as those who have been given a copy. I am not raising objections to that, because on this occasion what is being proposed seems to fit our needs and, therefore, I do not quibble.

I want, however, to safeguard our past practice, so that we can have it on record that when this procedure arises the Amendment in question could, for example, be read from the Chair. We have our Parliamentary rights, which have been safeguarded in this way only by the watchfulness of interested hon. and right hon. Members. As long as I am here, I shall use my experience to see that it continues.

Thank you for being magnanimous enough to let me make the point, Sir William. My final point is that I hope that as in the past copies of such Amendments will be made available for hon. Members, so that we can all see what we are agreeing to.

The Temporary Chairman

That point of order has been sufficiently settled.

Mr. Gordon Walker

I should like, first, to express our gratitude to the Government for what is a substantial alteration in the Bill, which meets the intention of our Amendment and what we seek to do. I feel, however, for the very reasons given by my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith), that it would be more appropriate if we could have the Amendment on the Order Paper for tomorrow. At first glance, I have no objection to it—it appears to me to achieve the purpose exactly—but there are many hon. Members, on both sides, who have not seen it. To preserve the rights of which my hon. Friend was speaking, although I do not think it will delay us in any way, it would be more appropriate to have the Amendment on the Order Paper tomorrow. Subject to that, we are grateful and I do not think we will be able to find anything wrong with the drafting.

Sir R. Cary

I join the right hon. Member for Smethwick (Mr. Gordon Walker) in thanking my right hon. Friend the Financial Secretary from this side for the course he has taken. When discussion on the Amendment began, I did not know that it might so quickly have this happy sequel. That an Amendment of this nature was already in draft, and might become the subject of immediate inclusion in the Bill, is of the greatest help. On behalf of those on this side who have followed this aspect of the Bill, I sincerely thank my right hon. Friend.

Mrs. Freda Corbet (Peckham)

I feel that I am really speaking before my turn, because the point I wish to make is so remote from the point which has just been made that, were it not for the omnipotent Ruling of the Chair, I should hesitate to enter the discussion at this stage. I cannot, however, resist the temptation to make hay while the sun is shining.

The sun, in the person of the Financial Secretary to the Treasury, is obviously so very bright at the moment that I cannot but cherish some hopes concerning the Amendment which is in my name, and which we are also discussing. My Amendment refers to Clause 2 and to the continuation not of the extra duty on the hydrocarbon oils, but of the extra fares which public transport bodies will be enabled to bring into operation as a result of the extra duty.

The Financial Secretary to the Treasury is familiar with the rôle which the London County Council has long been playing in the matter of the rate of fares charged by the London Transport Executive. He knows that on very many occasions the Council has availed itself of its right under the Act, as the local authority in the area in which the London Transport Executive operates, to make representations before the Transport Tribunal in public about the rate of fares to be charged. It has employed eminent counsel. It has very efficiently dissected the figures supplied by the London Transport Executive, and I think it has always resulted that the Executive has been bound to satisfy the Tribunal that the fares it proposed in no way exceeded the amount it required to discharge its liabilities.

Under the Bill, the proposition is that the increased fares shall come to an end in exactly the same way as it is proposed the increase in the hydrocarbon oil duty shall come to an end. What we should like to see is a provision rather similar to that which the Financial Secretary has now found it possible to accept for the duty itself. Clause 2 provides that the Executive shall, if it wishes to continue to charge the increased fares beyond the fortnight after the duty ceases to be charged, then make application to the Tribunal to retain those fares in being for a longer period.

The point which we wish to emphasise is that in so doing it can avail itself of an unusual form of application, that is to say, without a public hearing, and to the period during which this will apply there is no limit. My Amendment proposes that there shall be a limit of three months, at the end of which any hearing must be in public. I hope that the Financial Secretary will realise what great store the Council places upon this safeguard.

My hon. Friends and I have on the Notice Paper Amendments, which are not to be called, but which were intended to reduce the amount by which the Executive could increase the fares in the London area. Although the Amendments are not to be called, I shall not be out of order, I think, in saying that we have reason to suppose that the amounts by which the fares are intended to be raised may be excessive. There are a number of factors to take into account.

The Executive itself reckons it will have 50,000 more passengers. The absence of traffic on the roads, and the greater opportunity for the buses to get along quickly, may, in the words of its own officials, mean a "considerable saving." It has been estimated by them that an increase in the speed of the buses on the roads by only one mile an hour could save the Executive £2 million a year. Moreover, the proposed extra charges are to be made not only on the buses, but also on the trains, and one-third of the Executive's revenue is derived from the trains.

It appears to us that there is a danger that the Executive may be proposing to raise considerably more revenue than is justified by the extra charges falling upon it because of the increased duty. It is because we have those suspicions, and because we are determined to protect the London travelling public, that we are asking the Government to put a term to the time in which the London Transport Executive may make an application before the Transport Tribunal without having to subject itself to the ordeals of a public hearing, for those ordeals are a great safeguard to the travelling public.

In passing, I might say we feel that the new provisions, whereby emergency fares can be put into operation before there is an opportunity for a public hearing art all, have made it extremely difficult for such a hearing before the Tribunal to be effective. So, once again, I ask the Financial Secretary to the Treasury to do for us what he has just done for the whole of the Committee.

Mr. Arthur Skeffington (Hayes and Harlington)

I should like to support what has been said by my hon. Friend the Member for Peckham (Mrs. Corbet) on this Amendment. The concession which the Committee gratefully received in connection with the previous Amendment does not cover this point, which deals with the procedure for the length of time during which higher fares can be charged by the London Transport Executive. Therefore, it is right that for a minute or two we should develop the reasons for this Amendment.

As the hon. Lady said, it is not an accident that this Amendment appears in the names of three hon. Members who are also members of the London County Council, because for forty years or more, long before there was a London Transport Executive, the London County Council has always considered it part of its duties to speak on behalf of, before the war 4½ million, now 3¾ million London citizens who travel on the public services by road and rail. We feel that there is an obligation to consider how long the new fares, which come into force consequent upon the duty we are discussing, will last.

Subsection (4) of Clause 2 means, in effect, that the authority to increase charges shall come to an end at the time when the right to impose the additional duty comes to an end. Fares, however, may be charged at the higher rate for 14 days after that authority ceases, or for a longer period if either the traffic commissioners outside London or the Transport Tribunal in relation to London, allow a longer period. Further, the Clause is drawn extraordinarily wide, so that the Transport Tribunal can now lay down any procedure it wishes, and it alone can determine whether or not the hearing shall be in public or in private.

This is a departure from the procedure in relation to London fares in general. The London Transport Executive normally can only increase its charges if it follows the procedure laid down in Section 5 of the 1947 Transport Act. That means a public inquiry, with an opportunity for interested parties like the L.C.C. to examine the evidence, to call their own witnesses, and to take other steps in the interests of the travelling public.

9.30 p.m.

As my hon. Friend pointed out, there already exists, in connection with the London Transport Executive, an emergency procedure under the Transport Act of 1953 which has already severely curtailed the opportunities that previously existed for examining the evidence in any application for increased fares.

As a matter of principle the London County Council feels, and, I think, so do other interested bodies, that already the right to examine applications for higher fares and call evidence has been severely reduced under the emergency procedure. If the procedure under Clause 2 were allowed, there would not only be no opportunities for public examination of any application, but we might easily arrive at a position where the Transport Tribunal and the London Transport Executive came to some arrangements quite privately to continue higher fares for an indefinite period. There would be little legal opportunity either for complaint to be made or for any authority to force the London Transport Executive to explain for what further period higher fares were to be charged.

The Amendment proposes that if, after three months, the Executive desires increased fares, application should be made under the normal procedure of the 1947 Act and thus safeguard the position of Londoners and those who have to speak on their behalf. I hope, therefore, that if the Minister cannot accept the Amendment he will give an assurance that it will be impossible for a private arrangement to be made between the Tribunal and the Executive to continue higher fares for an indefinite period without the public and those who speak on their behalf having an opportunity to put their point of view.

Mr. H. Brooke

I want to reply to the points made by my two former colleagues on the London County Council, the hon. Lady the Member for Peckham (Mrs. Corbet) and the hon. Member for Hayes and Harlington (Mr. Skeffington), arising out of Clause 2. But as we are still technically debating an Amendment on Clause 1, I hope that I shall not be complicating matters further if I say that I do not demur to the suggestion made by the right hon. Member for Smethwick (Mr. Gordon Walker) that the Amendment as to the termination of the Bill should be taken on Report rather than tonight. I think that I made clear that I was in the hands of hon. Members and that all I wanted to do was to meet the convenience of the Committee.

I should like to reassure the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith). I know that he will take it from me that nobody is more jealous than I am of the traditions of the Committee and the House. On previous occasions when it has fallen to me to move a manuscript Amendment, where it was perhaps a matter of drafting, I have taken steps to make copies available to hon. Members beforehand. On this occasion, a fairly substantial change in a tax Bill is involved, and in such cases I think that it would be unsuitable for copies of a proposed Amendment to be distributed to hon. Members before it was moved in Committee. Because of the tax aspect this seemed to be rather different from the ordinary occasion, and that was why I followed the course that I did. I produced the Amendment and I said that I would leave it to the Committee to say whether I should move it at once or after notice.

Mr. Ellis Smith

I greatly appreciate what has taken place. My point was that where copies were available they should be sufficient in number to be available to all hon. Members in the Committee.

Mr. Brooke

The matter raised by the hon. Lady the Member for Peckham is of a somewhat technical character. I hope that I shall be able to satisfy her that the Amendment is not really necessary, and that at the same time the Government are not disregarding the anxiety of the London County Council about making sure that the interests of the travelling public in London are properly safeguarded.

I understand that the Amendment would accept the plan in the Bill, whereby the Transport Tribunal could determine its own procedure if the London Transport Executive were making an application for any increase of fares to be continued for a period of not more than three months after the duty came off. However, the hon. Lady is suggesting that, if the London Transport Executive were to take a more considerable step of seeking to establish before the Transport Tribunal that the increased fares should remain for more than three months after the duty was removed, it ought to go through the full statutory procedure.

To do that would really be somewhat a breach of the principle of the Bill. The Chancellor of the Exchequer said on Second Reading that the increase in costs due to the tax and the recent increase in price, which the oil companies have described as an emergency surcharge, should be met by special legislation and special methods and quite separately from the normal control of charges. The hon. Lady is envisaging a situation in which the London Transport Executive, not on account of general rises in costs but this particular rise, is nevertheless seeking to prolong an increase in fares for more than three months. It would be based on not permanent but these transient considerations.

I suggest to the hon. Lady that we should not get the two procedures mixed up. If the London Transport Executive is going before the Transport Tribunal with an application to increase fares, either an initial application or an application to continue an increase after the duty has been removed, it has to base its case on the additional costs which it has suffered as a result of the circumstances which have given rise to this Bill. That is a matter for which, I am sure, we ought to use the procedure laid down in the Bill. It would be rather unsuitable if the London Transport Executive were asked to go through the full statutory procedure, which takes a considerable time, simply to get permission to continue increased fares, arising out of the circumstances underlying the Bill, for a period lasting more than three months after the removal of the duty.

It strikes me that the real protection that the people of London have here will lie with the Transport Tribunal, which I should have thought would need an extraordinarily powerful case laid before it by the London Transport Executive before it would reach a decision in favour of the continuance of higher fares, not only during the time of the increased duty and not only for three months after that, but for more than three months after that, bearing in mind that the case put before the Tribunal could rest only on these increased costs and not on any other general increased costs or any considerations relating to the numbers of the travelling public or anything of that kind.

I know that this is a somewhat technical matter, but I hope that the hon. Lady and the hon. Member for Hayes and Harlington will appreciate that I have gone into it as carefully as I can. I think that, on balance, it would be best to keep to the general plan of the Bill, by which the Transport Tribunal can determine its own procedure in all applications arising out of the circumstances to which the Bill is addressed, and that we should retain the full statutory procedure for applications which are made to it on general and wider grounds.

Mrs. Corbet

I am rather alarmed by what the Financial Secretary says. It looks as if there really is visualised a possibility of the fares remaining at an increased rate for three months or longer than three months. If that is the case, whatever may be the reason for it, I consider that the London public ought to be heard. Representatives of London County Council ought to be able to demand public statements about the financial setup and reasons for the continuation.

I am very disappointed. I hope that the Financial Secretary will reconsider the matter and see whether he can deal with it, not necessarily as we have suggested but at least so that the London public will be safeguarded against a continuance of this special increase. This is something against which we must safeguard ourselves if at all possible. I should be grateful to the right hon. Gentleman if he would ensure that the extra fares do not persist longer than is necessary.

Mr. H. Brooke

I want to allay any misapprehensions. It was not I, but the hon. Lady, who mentioned a period of three months. I have no reason whatever to think that increased fares in London will extend for three months and still less that they will extend for more than three months after the end of the increase. I had to address myself to the points which the hon. Lady made. Clause 2 (4) defines with some precision the exceptional circumstances in which any increase in fares can be continued for more than a fortnight beyond the end of the duty. Indeed, the suggestion is conveyed by the terms of the Bill that a fortnight would normally be the maximum period. The only reason why subsection (4) is drafted as it is, is that in certain exceptional circumstances, for in- stance, if there had been delay at some stage, the period of a fortnight should not be an absolute bar. I certainly hope that we shall not see fares which have been increased under the Bill continuing in operation under the powers of the Bill for any considerable period of weeks after the duty has been removed.

Mrs. Corbet

I should like to pursue this matter. It has been said that I introduced the question of a period of three months, but that was to give plenty of rope, so to speak, so that the Transport Executive could not be in any difficulty. I thought that we might put in a maximum period beyond which London Transport would not be able to use any procedure other than the usual procedure. I hope that the Financial Secretary will reconsider the matter.

Mr. A. S. Moody (Gateshead, East)

I can understand that my hon. and right hon. Friends should be rather pleased that the Financial Secretary has offered a concession. We get so few concessions nowadays and so few direct statements that to receive one is likely to put us in a good humour. The Financial Secretary has agreed to draft an Amendment to ensure that within one month of the end of petrol rationing the tax will be removed. Our Amendment proposed to remove it at the end of the financial year.

I think that the Financial Secretary is smiling to himself and thinking that he has scored a great victory by offering us his Amendment. However, if petrol rationing continues for twelve months, the tax will continue for that period and even a month after it. Therefore, the Financial Secretary can express his good intentions to the world, knowing very well that the incidence of petrol rationing will stop him putting them into operation. We might achieve something by pressing our Amendment, but if we are to withdraw it, we must carefully consider the Amendment put forward on Report, or we shall be worse off than ever.

Amendment negatived.

9.45 p.m.

Mr. Ronald Williams (Wigan)

I beg to move, in page 2, line 10, at the end to add: (2) This section shall not have effect in respect of hydrocarbon oil used by any disabled person (with the authority of any Ministry) for propelling himself in a mechanically propelled vehicle or chair. The object of the Amendment is to make it quite out of the question that there should be any increase in this form of taxation payable by disabled persons who are obliged to use mechanically propelled vehicles or chairs. I am quite sure that any idea that this tax should be imposed upon such persons would be bitterly opposed by almost every hon. Member.

One should have in one's mind quite clearly the principle which ought to be applied in these distressing cases. In my view it would be a most shocking and disgraceful situation if, despite the economic difficulties we are in, we ever got it into our heads that we could not afford to meet the rightful claims of people who are stricken as these people are. We can afford to provide them with the chairs; with the mechanically propelled cars; with provision for the maintenance of those cars, and with free petrol—and we can afford to do that for everybody who is affected in this way. It is on the basis of that principle that the Amendment proceeds.

It was drafted before the Minister of Health gave the Answer which was published in respect of the last written Question which appeared in the OFFICIAL REPORT today. It is important for the Committee to ask itself whether or not, in view of what I have just said, the proposals which the Minister of Health put forward really meet the case. If they do, then, subject to him clarifying certain points in relation to them, it is possible that the Committee will not be detained very long in considering the matter. But I want to put to the Minister certain points which arise out of the Answer which he gave yesterday.

Probably for the sake of convenience, and bearing in mind that the right hon. Gentleman was addressing his Answer specifically to the Question as put, he mentioned three categories. I do not know whether it was intended that his words should cover the four categories referred to in the Ministry of Health statistics. If I refer to the four categories as I understand them, the Minister ally be able to say whether my construction of the position is the effect of the Answer given yesterday by him. First, disabled persons who are provided with Ministry of Health chairs receive a maintenance allowance of £57 per annum at present. If I have read the Minister's Answer correctly, under his proposal they will receive, as from 4th December, an additional £7 4s. per annum, bringing their total up to £64 4s.

Perhaps the Minister will look next at the maintenance allowance in respect of disabled persons who, although entitled to a Ministry of Health car, prefer to retain one of their own. At the moment they receive £80 per annum. I understand that they, like persons in the previous category, will receive an additional £7 4s. per annum, dating as before from 4th December, 1956, making a total in their case of £87 4s.

This is far too serious a question for us to go into minute arithmetical details as to the difference in proportion between the two categories, but there was obviously some ground for assessing the amounts decided upon originally, and the Minister presumably has some reason for allowing a different proportion, as would appear to be the case from the figures which he gave. I do not say that it is necessarily wrong. I simply invite the Minister to make some observation about it.

The remaining two categories are concerned with the petrol duty allowance and free petrol. As to the petrol duty allowance, war pensioners who use invalid motor tricycles now receive £3 per annum, and, as I understand it, the Minister proposes an increase of £4, bringing the total allowance up to £7 per annum as from 4th December, 1956.

The final category is that of civilian patients who use National Health Service motor tricycles. They now receive a free petrol allowance of 14 gallons per annum, and the Minister proposes to give them an additional 10 gallons, making a total of 24 gallons of free petrol per annum, as from 4th December, 1956. I should like the Minister to say quite categorically whether those figures are correct. If they are not, perhaps he will show me where I am wrong.

The only misgiving which I have is not as to the figures themselves or the categories that they represent. I ask the Minister to consider that this proposal covers all cases of war pensioners, all cases under the Industrial Injuries Act and under the Workmen's Compensation Acts, that it will cover some cases of sickness, but not all, and that there will be some cases which are not covered because the disablement took place prior to the time when the regulations came into force.

If I am right in assuming that to be the position, it seems to me that it is open to the Minister to apply the principle which I suggested should obtain in cases of this sort, and to include those other cases. It would really be a disgrace if at the present time anybody in the country who was so disabled that he or she was obliged to use an invalid chair or car in order to get about was made to bear, in respect of their use of such vehicles, any of the burdens which are now being imposed in the present crisis. That, I think, would be absolutely contrary to the views held by the Government themselves, because otherwise the Minister of Health would not have given the Answer which he gave yesterday.

However, it seems to me that there is that category of disabled persons who may not be covered because they have not been thought of in this connection and who, if they are left out, will not only have to carry a burden which to my mind has been most unfairly imposed upon them up to the present, but in addition will have to pay the increased tax in the same way as people who are not disabled. I am sure that the Minister will give sympathetic consideration to those cases.

Mr. Tom Brown (Ince)

During this debate the Economic Secretary designated himself as a simple but warm-hearted lawyer. So far, however, not much of the warmth generated from the Government Front Bench has reached this side of the Committee. The hon. and learned Gentleman has left me and my hon. Friends on this side in a very chilly state indeed, because, so far, he has not given us a solitary thing. On this occasion, however, the hon. and learned Gentleman has an opportunity of at least extending the warmth which he claimed for himself to the unfortunate people to whom the Amendment refers. Therefore, I hope that he will at least give his sympathy and some concession to the people on whose behalf we are pleading.

When the Financial Secretary made a statement in Committee of Ways and Means, on 5th December, it appeared that his Department had been struck with the effect which this Bill would have upon these unfortunate people. I was very apprehensive as he proceeded with his statement, and I asked myself what effect this would have upon these unfortunate people who are using motor-propelled vehicles. He consoled us with this thought: Beyond this bare fact, there are two points of interest which I particularly wish to mention. It is impossible to make concessions by way of rebate from the increased Duty to any class of consumer. Nevertheless, I am very much aware that there is one group, in particular, whom the Committee would wish, if possible, to shield from hardship, namely, disabled persons, whether ex-service pensioners or civilians, who depend for getting about on a motor invalid tricycle or other vehicle. For technical reasons, it would be impossible to give them relief from the tax as such, but my right hon. Friends the Minister of Health and the Secretary of State for Scotland propose to increase the allowances which they make towards the running costs of invalid vehicles used by disabled persons in such a way that hardship may be avoided." —[OFFICIAL REPORT, 5th December, 1956; Vol. 561, c. 1385.] I was heartened when I heard him make that statement. But what do we find? We find that that statement has not gone to the fullest extent. It is true to say that, although it includes a number of people, it excludes a small section of the community who are, unfortunately, the victims of incapacity. Therefore, I strongly support what my hon. Friend the Member for Wigan (Mr. R. Williams) said, that outside the ambit of this Bill there are a few people who were not covered in 1948. They were left by the wayside and they are still left by the wayside. What this Bill does, apart from many other things, is to make their life inevitably harder than it was before the Bill came before the House. I therefore ask the Minister at least to generate a little more warmth towards these people.

In the mining industry we have a number of paraplegic cases, but we also have a number of cases which are not covered and it is for those that I am making my plea. These men were denied the benefits conceded by the Ministry of Health in 1948 and also the benefits conceded under the scheme promoted by the Ministry of Pensions, now merged into the Ministry of Pensions and National Insurance. These people will have to bear, consequent upon the increased tax, an increased expenditure of 2s. 10d. a week. Coupled with the increase in the cost of National Health Service prescriptions which they will have to pay, they will also have this increased taxation upon the petrol they use; and they will find it extremely difficult to meet it.

10.0 p.m.

Many of these people have been rehabilitated through rehabilitation schemes, and are trying to earn their own living. Does anyone suggest that it is a Christian action to make it more difficult for them to live? Does anyone suggest that we are doing the right thing by imposing an additional hardship on these unfortunate people? Surely we have got beyond that. This is the only Amendment which deals directly with this human problem, and I have been thinking that the Minister would give us some hope, that he would concede something to these unfortunate people.

Why is it that they will be denied the benefit for which we ask in this Amendment? Before the provision of motor-propelled vehicles for these people, in 1948, they were assisted by a number of charitable organisations whose generosity shamed the two Ministers into making provision for them. Now they are to be left high and dry. I am not unmindful of what we have done since 1952, 1954 and 1956 to remedy the injustices which these people suffered. We have helped those hitherto neglected by legislation. Surely we do not now seek to perpetuate a state of affairs which we have been trying to remedy during the last four years.

There will be far more restful consciences in the Ministry of Health and in the Ministry of Pensions and National Insurance if something is conceded to these people which they have been denied in former years. I cannot bring myself to think that right hon. and hon. Gentlemen opposite will deny this concession to these unfortunate people. I beg them to accept this Amendment.

Mr. A. E. Hunter (Feltham)

I wish to support the Amendment and to add my voice to those of my hon. Friend the Member for Wigan (Mr. R. Williams) and my hon. Friend the Member for Ince (Mr. T. Brown). This is a humane Amendment. It is an effort to ensure that the burden of this act does not fall upon war disabled people, or persons injured in the factories or workshops or on the road, and whose welfare is the concern either of the Ministry of Health or the Ministry of Pensions and National Insurance. Unless a concession is made to them tonight, this tax will prove a burden on these disabled people.

Take the case of a disabled ex-Service man travelling between his home and his place of work in an invalid motor chair or invalid motor car—for these disabled persons cannot use buses or railways or public transport. If he travelled 100 miles per week in a car doing 30 miles to the gallon, the tax would be 5s. If he travelled 200 miles per week, the tax would be 10s. It is no good the Economic Secretary saying that 5s. or 10s. per week is equal to one-third of a point on the cost-of-living index. However good the hon. and learned Gentleman is, not even he could make out a case of that sort. The tax could easily be 15s. per week if the man did more than 200 miles, and the tax would cause great hardship to him.

The least fortunate people in the community are the disabled ex-Service men, and workmen disabled in factory accidents or on the road, who have to use motor cars supplied by the Ministry of Pensions and National Insurance or the Ministry of Health. They should be exempted from the tax. I appeal to the Financial Secretary to give this concession, when he replies to the debate. This Amendment is supported by hon. Members on both sides of the Committee. If these assurances are not given, I hope that my hon. Friend will force it to a Division.

Mr. James Simmons (Brierley Hill)

This is a human question. We do not have a great deal of time to discuss human questions here. I want to make one or two points clear on behalf of the disabled ex-Service men. The case for the industrially disabled has been put by my hon. Friends.

Does the Minister consider that the increased allowance covers the rise in price as well as the tax increase, and can he give us his computation? The provision of cars by the Ministry is covered by the concession, for which we are very grateful, but I am concerned about disabled men who are not sufficiently disabled, according to their assessment, to qualify for a car or a mechanically-propelled vehicle. Yet they are so disabled that their mobility is considerably reduced, and because of the nature of their occupation they have to use cars of their own. Can these people not have consideration in the form of a petrol concession? Otherwise, many of them will find it difficult to maintain their employment. One result of the petrol shortage will be that public transport will be much more crowded in the future than in the past, and that, to the disabled man, is a very serious handicap.

Will an allowance be given to a man who is so badly disabled that a friend regularly transports him to and from work? I am referring to a man who is incapable of driving a car and who would not be able to get a car from the Ministry but who has the use of a car to and from work. Could not a petrol allowance be given in respect of such cases? I do not want to delay the proceedings, but I am making a suggestion to the Minister on behalf of all disabled men in many cities, including Birmingham, which gives free transport to leg-disabled men? Will the Financial Secretary use his influence, along with the Ministers of Pensions, Health and Transport, to get local authorities and private transport undertakings to give these people a concession? While we are talking of disabled men let us go the whole hog and obtain for them as much as we can.

Mr. H. Brooke

I know that this Amendment was put on the Notice Paper before the Minister of Health gave his Answer to a Question yesterday. I am glad that the Answer has set at rest the minds of many people.

I thought it a little unkind when the hon. Member for Ince (Mr. T. Brown) suggested that the atmosphere was entirely chilly. We did move fast about this. Within twenty-four hours of the Chancellor making his announcement of the new tax I took the next opportunity, when moving the Ways and Means Resolution the following day, to indicate that we were going to make adjustments in the existing allowance.

Purposely, before this Committee stage started, my right hon. Friend the Minister of Health made sure that he would have an opportunity—which was given him— of answering a Question appearing on the Order Paper so that we could enter the debate with the full knowledge of what he was going to do.

Mr. T. Brown

I am not blaming the Government or any Department for the speed with which they might act; what I am grumbling about is that they have not included the people whom I want to see included.

Mr. Brooke

It brings me back to the Amendment. I think it is probably a common understanding on both sides of the Committee that it is not possible by any Amendment of this kind to a tax Bill to meet the needs of any of these categories of people. As I explained in discussion of an earlier Amendment, the tax is charged at the time when the petrol leaves the oil storage depot, and it is quite impossible at that stage to identify particular gallons which are to go into the tanks of cars or vehicles of disabled people. That, no doubt, is why, when hon. Members opposite were in power, this scheme was devised in 1950.

I would remind hon. Members opposite who are suggesting that there has been any niggardliness on our part, that in fact it was we who extended the scheme in 1952, and we adopted an extension which, if I remember rightly, our predecessors had refused in the previous two years. I certainly do not want to suggest that we should weigh party gain or loss here. We are all concerned to see how we can handle this matter best at this time when we have problems created by a temporary rise in the duty.

The hon. Member for Wigan (Mr. R. Williams) went over the figures. So far as I could ascertain, his figures and calculations were right. He queried why there was not a proportionate allowance for people who prefer to use their own cars. The reason is that what we are increasing is the petrol element in the grant which they receive and the petrol element is not altered by the ownership of the car. That is the explanation, and I hope that will set all doubts at rest.

The case made by the hon. Member for Ince and certain other hon. Members is that this does not go wide enough. They have urged that the Government should accept this Amendment, but if I read it aright, most of the cases to which they have called attention would them-selves lie outside the terms of the Amendment. I, therefore, must warn the Committee that we should appear rather foolish if we were to divide on an Amendment which, in itself, would certainly not cover many of the people to whom hon. Members were referring.

10.15 p.m.

Mr. R. Williams

That depends upon the interpretation to be placed upon the parenthetical observation which appears in the course of the Amendment and which says: with the authority of any Ministry. I need not go into detail or resort to any great ingenuity to indicate that there is an open invitation there to any Government, if they care to accept it, to split the whole thing wide open and to give the necessary authority in respect of all the cases which are not now covered. It would not be outside the terms of the Amendment. I beg the Minister to consider it from this angle: whatever the effect of the pronouncement of the Minister of Health yesterday, or the effect, according to his interpretation, of this Amendment, there is a chance here to do something. I think that the Minister has got the will to do it, and it should not fall on a technical point.

Mr. Brooke

I think I have established the point that we should not be improving the position in any way by accepting the Amendment. My right hon. Friend the Minister of Health has made a point of being here throughout the debate. It is he and the Secretary of State for Scotland who are responsible for these allowances, and he has heard the whole of the debate.

This is a temporary Bill, and it would not be possible to make novel arrangements related to a temporary situation to widen the categories of grant beyond what has been found possible by either Government in the past six years when we have been addressing our minds to this question. I entirely understand the motives of hon. Members in pleading as they have done. I think that they will not charge me with being either hardhearted or foolish if I put it to the Committee that, when this matter has been carefully thought out by successive Governments over a period of years, it would not be practicable or reasonable to make a sudden change in relation to the provisions of a temporary Bill.

What we are doing is to take the scheme which has been operating hitherto—a scheme which I am glad to say has given assistance to a large number of deserving people—and we are making the necessary adjustments to that scheme so that those people shall be guarded from having to bear any additional burden through this increase in tax. That is what we are doing, and I trust that hon. Members will not divide the Committee on the simple plea, which I understand but which I cannot respond to, that we should make a far-reaching change to meet this temporary situation.

Mr. Simmons

Will the right hon. Gentleman answer the question which I put to him about the increase and say whether it covers the increase in price?

Mr. Brooke

These allowances have always been calculated in the past to cover the increase in tax but not to make allowance for any changes in the commercial price.

Mr. T. Brown

We do not wish to divide the Committee, because it would appear that we were turning down the concession granted by the Ministry. We say humbly that we accept half a loaf rather than the whole loaf, but I beg the Minister to have another look at the matter. I plead with him as I have never pleaded before, because there are few other people who have suffered such grave injustices as these people did before 1948. I ask him to see whether, between now and the Report stage, he can meet the case of these unfortunate people.

Mr. R. Williams

The Minister has made perfectly clear the categories covered by the Bill and I am deeply grateful to him for his observations on that aspect. On the other aspect of the matter, one must in fairness say to the Minister that probably this Bill could not stand the weight of the additional categories because of purely technical reasons arising out of the Bill itself. Not-withstanding that the Minister is in that difficulty, which I recognise, we have in this debate pinpointed a most deserving class of case who could, in our view, be dealt with immediately by other and more satisfactory methods. We will leave that question with confidence to the Minister.

In view of the explanations which he has given and subject to what I have said, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Gordon Walker

I do not want to keep the Committee long at this last stage of the most important Clause in the Bill, but partly because of the Amendment that the Government will be introducing on Report to make it clearer that the Bill is a temporary one, I want in a few words to make it quite clear that we still dislike the Bill, even though it is temporary.

We certainly welcome the fact that the Bill is more clearly temporary than it was before, but we made it clear on Second Reading, and we are still of the opinion, that it is a bad Bill, even as a temporary Measure. Indeed, now that it has been tied to the period of rationing, which we all hope—certainly the Government hope—will not last for many months, one wonders whether it has been worth while to go through so much trouble, to do so much harm and to cause so much inconvenience to so many people for the sake of a tax that will presumably last for only a few months. When it becomes as temporary as it now will be, people will wonder even more than before whether all this trouble has been worth while.

Some of the changes that will happen will not be so easy to reverse. If fares go up, for instance, under the special provisions of Clause 2, it will not be so easy

to pull them down again. Companies, even public transport concerns, being the sort of concerns they are, will try to cling to fares increases which have been made as a result of this temporary tax. Although the shilling will go when rationing ends, the 5d. will remain. In fact, it may even become 7d., 8d. or 9d. before rationing has ended.

The only thing which I can think is good about the Bill is that the Government, in the Amendment which they will introduce on Report, have finally committed themselves not to raise the tax on petrol in the next Budget. To do so would make nonsense of the thing. The Chancellor has told us that he is going to raise Income Tax and he is not going to raise the tax on petrol. That is something that we have gained as a result of these debates.

I will not repeat the grounds that led us, on Second Reading, to consider this a bad Bill. We still hold that it is a bad Bill. Because we have such a strong opinion about the unwisdom of this temporary but extreme disturbance of our economy and our life, we ought to divide against this Motion.

Mr. Walker-Smith

Before the Committee divides, I do not want to say anything in reply to the right hon. Gentleman except that he has paraphrased the observations of my right hon. Friend the Chancellor of the Exchequer on 4th December, but that my right hon. Friend's intentions are as stated in that statement.

Question put:—

The Committee divided: Ayes 210, Noes 165.

Division No. 28.] AYES [10.25 p.m.
Agnew, Cmdr. P. G. Boyd-Carpenter, Rt. Hon. J. A. Doughty, C. J. A.
Aitken, W. T. Brooke, Rt. Hon. Henry Drayson, G. B.
Allan, R. A. (Paddington, S.) Bryan, P. du Cann, E. D. L.
Alport, C. J. M. Bullus, Wing Commander E. E. Duncan, Capt. J. A. L.
Amery, Julian (Preston, N.) Burden, F. F. A. Eden, J. B. (Bournemouth, West)
Amory, Rt. Hn. Heathcoat (Tiverton) Butcher, Sir Herbert Emmet, Hon. Mrs. Evelyn
Arbuthnot, John Butler, Rt. Hn. R. A. (Saffron Walden) Errington, Sir Eric
Armstrong, C. W. Carr, Robert Farey-Jones, F. W.
Ashton, H. Cary, Sir Robert Fisher, Nigel
Atkins, H. E. Channon, H. Galbraith, Hon. T. G. D.
Baldwin, A. E. Chichester-Clark, R. Garner-Evans, E. H.
Balniel, Lord Clarke, Brig. Terence (Portsmth, W.) George, J. C. (Pollok)
Barber, Anthony Conant, Maj. Sir Roger Gibson-Watt, D.
Barlow, Sir John Cooper-Key, E. M. Glover, D.
Baxter, Sir Beverley Cordeaux, Lt.-Col. J. K. Godber, J. B.
Beamish, Maj. Tufton Corfield, Capt. F. V. Gomme-Duncan, Col. Sir Alan
Bell, Philip (Bolton, E.) Craddock, Beresford (Spelthorne) Gower, H. R.
Bennett, F. M. (Torquay) Currie, G. B. H. Graham, Sir Fergus
Birch, Rt. Hon. Nigel Davidson, Viscountess Grant-Ferris, Wg Cdr. R. (Nantwich)
Bishop, F. P. Deedes, W. F. Green, A.
Body, R. F. Digby, Simon Wingfield Gresham Cooke, R.
Bossom, Sir Alfred Donaldson, Cmdr. C, E. MoA. Grimston, Sir Robert (Westbury)
Grosvenor, Lt.-Col. R. G. Longden, Gilbert Redmayne, M.
Gurden, Harold Lucas, Sir Jocelyn (Portsmouth, S.) Rees-Davies, W. R.
Hall, John (Wycombe) Lucas, P. B.(Brentford & Chiswick) Ridedale, J. E.
Harris, Frederic (Croydon, N. W.) Lucas-Tooth, Sir Hugh Rippon, A. G. F.
Harris, Reader (Heston) McAdden, S. J. Robinson, Sir Roland (Blackpool, S.)
Harrison, A, B. C. (Maldon) McCallum, Major Sir Duncan Roper, Sir Harold
Harrison, Col. J. H. (Eye) Macdonald, Sir Peter Ropner, Col. Sir Leonard
Harvey, Air Cdre. A. V. (Macclesfd) Mackeson, Brig. Sir Harry Sohofield, Lt.-Col. W.
Harvey, John (Walthamstow, E.) McKibbin, A. J. Scott-Miller, Cmdr. R.
Heald, Rt. Hon. Sir Lionel Mackie, J. H. (Galloway) Sharples, R. C.
Heath, Rt. Hon. E. R. G. McLean, Neil (Inverness) Shepherd, William
Henderson, John (Cathcart) MacLeod, John (Ross & Cromarty) Smithers, Peter (Winchester)
Hesketh, R. F. Macmillan, Maurice (Halifax) Spearman, Sir Alexander
Hill, Rt. Hon. Charles (Luton) Macpherson, Niall (Dumfries) Stanley, Capt. Hon. Richard
Hill, Mrs. E. (Wythenshawe) Maddan, Martin Stevens, Geoffrey
Hirst, Geoffrey Maitland, Cdr. J. F. W.(Horncastle) Steward, Harold (Stockport, S.)
Holland-Martin, C. J. Maltland, Hon. Patrick (Lanark) Stewart, Henderson (Fife, E.)
Holt, A, F. Manningham-Buller, Rt. Hn. Sir R. Stoddart-Scott, Col, M.
Hornby, R. P. Markham, Major Sir Frank Storey, S.
Howard, Hon. Greville (St. Ives) Marlowe, A. A. H. Studholme, Sir Henry
Howard, John (Test) Marples, A. E. Sumner, W. D. M. (Orpington)
Hughes Hallett, Vice-Admiral J. Marshall, Douglas Taylor, William (Bradford, N.)
Hutchison, Sir Ian Clark(E'b'gh, W.) Mathew, R. Teeling, W.
Hylton-Foster, Sir H. B. H. Maude, Angus Temple, J. M.
Iremonger, T. L. Maudling, Rt. Hon. R. Thomas, Leslie (Canterbury)
Irvine Bryant Godman (Rye) Maydon, Lt.-Comdr, S. L. C. Tiley, A. (Bradford, W.)
Jenkins, Robert (Dulwich) Molson, Rt. Hon. Hugh Tilney, John (Wavertree)
Jennings, J. C. (Burton) Mott-Radclyffe, C. E. Turner, H. F. L.
Jennings, Sir Roland (Hallam) Nabarro, G. D. N. Turton, Rt. Hon. R. H.
Johnson, Dr. Donald (Carlisle) Nairn, D. L. S. Vaughan-Morgan, J. K.
Johnson, Eric (Blackley) Neave, Alrey Vickers, Miss J. H.
Kaberry, D. Nicholls, Harmar Vosper, D. F.
Keegan, D. Nicholson, Godfrey (Farnham) Wakefield, Edward (Derbyshire, W.)
Kerby, Capt. H. B. Nicholson, N. (B'n'm'th, E. & Chr'oh) Wakefield, Sir Wavell (St. M'lebone)
Kerr, H. W. Nugent, G. R. H. Walker-Smith, D. C,
Kershaw, J. A. Oakshott, H. D. Wall, Major Patrick
Kimball, M. O'Neill, Hn. Phelim (Co. Antrim, N.) Ward, Hon. George (Worcester)
Lagden, G. W. Orr, Capt. L. P. S. Ward, Dame Irene (Tynemouth)
Lambert, Hon. G. Osborne, C. Watkinson, Rt Hon. Harold
Lambton, Viscount Page, R. G. Webbe, Sir H.
Leavey, J. A. Panned, N. A. (Kirkdale) Whitelaw, W. S. I.(Penrith & Border)
Leburn, W, G. Partridge, E. Williams, Paul (Sunderland, S.)
Legge-Bourke. Maj, E. A. H. Pickthorn, K. W. M. Williams, R. Dudley (Exeter)
Legh, Hon. Peter (Petersfield) Pott, H. P. Wills, G. (Bridgwater)
Lindsay, Hon. James (Devon, N.) Powell, J. Enoch Wilson, Geoffrey (Truro)
Lindsay, Martin (Solihull) Price, David (Eastleigh) Wood, Hon. R.
Linstead, Sir H. N. Prior-Palmer, Brig. 0. L.
Llewellyn, D. T. Raikes, Sir Victor TELLERS FOR THE AYES:
Lloyd, Maj. Sir Guy (Renfrew, E.) Rawlinson, Peter Mr. Richard Thompson and
Mr. Hughes-Young.
NOES
Ainsley, J. W. Dodds, N. N. Irving, S. (Dartford)
Allaun, Frank (Salford, E.) Donnelly, D. L. Isaacs, Rt. Hon. G. A.
Allen, Arthur (Bosworth). Dugdale, Rt. Hn. John (W. Brmwch) Jay, Rt. Hon. D. P. T.
Allen, Scholefield (Crewe) Edwards, Rt. Hon. John (Brighouse) Jeger, Mrs. Lena (Holbn & St. Pncs. S.)
Awbery, S. S. Edwards, Rt. Hon. Ness (Caerphilly) Johnson, James (Rugby)
Balfour, A. Edwards, Robert (Bilston) Jones, Rt. Hon. A. Creech (Wakefield)
Bence, C. R. (Dunbartonshire, E.) Edwards, W. J. (Stepney) Jones, Jack (Rotherham)
Benson, G. Evans, Albert (Islington, S.W.) Jones, J. Idwal (Wrexham)
Blackburn, F. Fernyhough, E. Jones, T. W. (Merioneth)
Blyton, W. R. Fienburgh, W. King, Dr. H. M.
Boardman, H. Finch, H. J. Lawson, G. M.
Bottomley, Rt. Hon. A. G. Fletcher, Eric Lee, Frederick (Newton)
Bowden, H. W. (Leicester, S.W.) Forman, J. c Lever, Leslie (Ardwick)
Braddock, Mrs. Elizabeth Fraser, Thomas (Hamilton) Lewis, Arthur
Brockway, A. F. Gordon Walker, Rt. Hon. P. C. Lindgren, G. S.
Broughton, Dr. A. D. D. Greenwood, Anthony Logan, D. G.
Brown, Thomas (Ince) Grey, C. F. Mabon, Dr, J. Dickson
Burke, W. A. Griffiths, David (Rother Valley) MacColl, J. E.
Champion, A. J. Griffiths, Rt. Hon. games (Llanelly) McGhee, H. G.
Chapman, w. D. Hale, Leslie McInnes, J.
Chetwynd, G. R. Hall, Rt. Hn. Glenvil (Colne Valley) McKay, John (Wallsend)
Coldrick, W. Hannan, W. McLeavy, Frank
Collick, P. H. (Birkenhead) Harrison, J. (Nottingham, N.) MacMillan, M. K. (Western Isles)
Corbet, Mrs. Freda Hayman, F. H. MacPherson, Malcolm (Stirling)
Craddock, George (Bradford, S.) Herbison, Miss M. Mahon, Simon
Cronin, J. D. Hobson, C. R. Mainwaring, W. H.
Cullen, Mrs. A. Houghton, Douglas Mallalieu, E. L. (Brigg)
Darling, George (Hillsborough) Howell, Charles (Perry Barr) Mann, Mrs. Jean
Davies, Ernest (Enfield, E.) Hughes, Cledwyn (Anglesey) Marquand, Rt. Hon. H. A.
Davies, Harold (Leek) Hughes, Emrys (S. Ayrshire) Mason, Roy
Deer, G. Hunter, A. E. Mellish, R. J.
Delargy, H. J. Hynd, J. B. (Attercliffe) Mikardo, Ian
Mitchison, G. R. Pryde, D. J. Taylor, John (West Lothian)
Monslow, W. Randall, H. E. Thomas, George (Cardiff)
Moody, A. S. Redhead, E. C. Thomas, lorwerth (Rhondda, W.)
Morris, Percy (Swansea, W.) Roberts, Albert (Normanton) Timmons, J.
Mort, D. L. Roberts, Goronwy (Caernarvon) Tomney, F.
Moss, R. Robinson, Kenneth (St. Pancras, N.) Warbey, W. N.
Moyle, A. Ross, William Watkins, T. E.
Mulley. F. W. Royle, C. Weitzman, D.
Neal, Harold (Bolsover) Short, E. W. Wells, William (Walsall, N.)
Oram, A. E. Shurmer, P. L. E. Wheeldon, W. E.
Orbach, M. Silverman, Julius (Aston) White, Henry (Derbyshire, N.E.)
Owen, W. 0. Simmons, C. J. (Brierley Hill) Wilcock, Group Capt. C. A. B.
Paling, Rt. Hon. W. (Dearne Valley) Skeffington, A. M. Williams, David (Neath)
Palmer, A. M. F. Slater, Mrs. H. (Stoke, N.) Williams, Rev. Llywelyn (Ab'tillery)
Pannell, Charles (Leeds, W.) Slater, J. (Sedgefield) Williams, Ronald (Wigan)
Pargiter, G. A. Smith, Ellis (Stoke, S.) Williams, W. R. (Openshaw)
Parker, J. Sorensen, R. W. Willis, Eustace (Edinburgh, E.)
Parkin, B. T. Soskice, Rt. Hon. Sir Frank Wilson, Rt. Hon. Harold (Huyton)
Pearson, A. Sparks, J. A. Winterbottom, Richard
Pentland, N. Steele, T. Woof, R. E.
Price, J. T. (Westhoughton) Stewart, Michael (Fulham) Yates, V. (Ladywood)
Price, Philips (Gloucestershire, W.) Stones, W. (Consett)
Probert, A. R. Summerskill, Rt. Hon. E. TELLERS FOR THE NOES:
Proctor, W. T. Taylor, Bernard (Mansfield) Mr. Wilkins and Mr. Holmes.

Clause ordered to stand part of the Bill.