Clause 1.—(INCREASE OF DUTIES.)

HC Deb 13 December 1956 vol 562 cc633-96

3.47 p.m.

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

I beg to move, in page 2, line 10, at the end to insert: (2) If no order is made by the Treasury under this section so as to come into force at or before the expiration of one month beginning with the first day after the passing of this Act on which no petrol-rationing order is in force, this Act shall have effect as it the Treasury had made an order under this section to come into force at the expiration of that month. In this subsection "petrol-rationing order" means an order made under Regulation 55 of the Defence (General) Regulations, 1939, restricting the supply, acquisition, use or consumption of any goods chargeable with the customs or excise duty on hydrocarbon oils. About nine o'clock last night, during the Committee stage of the Bill, we were discussing—

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

On a point of order. It may be within your recollection, Mr. Speaker, that when the Committee was meeting last night we had before us a manuscript Amendment which had been circulated by the Financial Secretary. The right hon. Gentleman explained, and the Committee readily understood, why it was circulated in that way. That was the only way in which it was possible to get anything before the Report stage. The Opposition, who moved that something should be done before the Report stage, have been denied the opportunity, and I should like to put on record that we consider that this is something we should not carry on, and register a protest against this proceeding.

Mr. Speaker

I have no knowledge officially of what happened during the Committee stage. I understand that a manuscript Amendment was circulated and agreed to by the Committee. But the Amendment about to be moved by the Financial Secretary to the Treasury is quite in order and I am bound to listen to it.

Mr. Brooke

Last night we were discussing an Opposition Amendment to fix a definite date for the termination of Clause 1 of the Bill. The Opposition having chosen, with a curious sense of the fitness of things, the final day of the Income Tax year, it fell to me to say that that seemed an inappropriate day to take for the purpose but that I had been deeply impressed by the views expressed by a number of my hon. Friends on the Second Reading of the Bill to the effect that more precision should be given in the body of the Bill to the word "temporary", which appears in the Title.

I therefore came forward with the proposition that it would be well to write into the Bill a provision that Clause 1, which relates to the additional duty, should lapse one month after the end of rationing, if it had not previously been terminated by Treasury Order.

As the right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) said yesterday, I put myself in the hands of the Committee. I had a manuscript Amendment ready and I invited the Committee to express its wish, subject to the Chair, Whether that Amendment should be moved as a manuscript Amendment at the time or whether it would be better to put it on the Order Paper and take it on Report today. The right hon. Gentleman suggested that he would like to see it on the Order Paper, so that it could be examined and we could take it on Report. I did not demur to that. All I wanted to do was to seek the convenience of the Committee and not to take up unnecessary time.

Here is the Amendment. Its sole purpose it to safeguard the House and the country against this Measure's standing on the Statute Book and being kept in operation for an indefinite time despite the end of rationing. We are probably at one on both sides of the House that it would be unreasonable to demand that the increase in duty should fall on the very day of rationing ending. They are two different operations. There may be adjustments to be made and so forth. I trust that the House will agree that it would be reasonable to give a period of one month after the date when rationing ends. The Bill will then terminate automatically, if the Amendment is inserted in the Bill.

I am not suggesting thereby that because the Amendment will now appear in the Bill, the Treasury will remain inert and will definitely wait until the end of the month. The Government would use their discretion on the matter. We shall safeguard the House and the country on this point, which I know gave rise to a certain amount of legitimate doubt and of illegitimate suspicion that the word "temporary" might be given a somewhat wider interpretation by the Government of the day. I hope that it may be accepted on both sides of the House that the insertion of the Amendment will make a substantial improvement in the Bill.

Mr. George Chetwynd (Stockton-on-Tees)

Can the right hon. Gentleman give an assurance that the Government will not keep rationing on longer than would otherwise be necessary in order to make up revenue which they need?

Mr. Brooke

This is getting near to the puzzle of the hen and the egg. It will not be for me to have any say about when rationing ends, but I can give the substantial assurance which the hon. Gentleman needs, namely, that the Bill is based on rationing and not rationing on the Bill.

Mr. Gordon Walker (Smethwick)

Of course, we welcome the Amendment. We are sorry that this is the only way, a rushed way, that an Amendment can be put down for the Report stage of the Bill. The right hon. Gentleman said that he came forward with the proposal. That is not quite true. It was we who came forward with it in the first place, even in the actual debate in Committee, when he produced his manuscript Amendment. None the less, it does not really matter who suggested it. The important thing is that it will now be in the Bill.

So far as we can see, the words meet their object, and do so rather neatly and cleanly. There is still, though, the question about the temporary nature of the Bill. As my hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) has just pointed out, the duration of the duty is now specifically tied to rationing, and this makes it all the more urgent that rationing should be brought to an end at the first possible moment. It will be defeating the intention of the House if, to keep the duty on a little while to make up revenue lost in some other way, the Government kept rationing in force for even only a week or two. We should then be worse off than we are now.

The other danger is that we might be tied to the month. The word "month" is now in the Bill. We on this side of the House very strongly hope that a month will not be necessary and that the other part of the Bill which enables the Treasury to bring the duty to an end by Order will be used, so that we can get rid of the duty within one or two weeks after the end of rationing. We would be very worried if the full month were used. Anyhow, we ourselves urged this as one of the ways in which the Government could emphasise and underline the temporary nature of the duty, so we support the Amendment.

Sir Robert Cary (Manchester, Withington)

I would join the right hon. Gentleman in expressing my thanks to the Financial Secretary to the Treasury for this proposal. I will not reiterate what I said in the Committee last night. That would be over-egging the pudding. I will take up one point about the termination of the month. If we are invited to tear up our ration books on, say, 5th March, the Treasury. I was glad to hear from my right hon. Friend, will not just lie fallow but, within a matter of days. will find it possible for this scheme to be brought to an end.

Amendment agreed to.

3.57 p.m.

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

I beg to move, That the Bill be now read the Third time.

It is only 72 hours since the Second Reading of the Bill was moved, and it is only 17 hours since we concluded the Committee proceedings. It is within the recollection of the House that the Bill has loomed very large in the Parliamentary proceedings of this week and has taken a substantial share of the time and attention of hon. Members during the week. In those circumstances, it would be inappropriate for me to say very much now in commending the Bill on Third Reading, or to trespass for more than a few minutes upon the indulgence of the House in doing so.

There have been two changes of substantial importance in the Bill as the result of the very full and informed discussions which have taken place. On the Second Reading, my hon. and learned Friend the Member for Hove (Mr. Marlowe) drew attention to the difficulties of provincial taxicab drivers owing to the slow machinery of the byelaw procedure which governs the regulation of their fares. The new Clause 3, incorporated late last night in the Committee, enables authorities to make an immediate temporary increase in taxi fares without going through the normal and necessarily somewhat slow and elaborate byelaw-making procedure.

The ether and very important addition is that which the House has just made on Report, by adding a new subsection (2) to Clause 1. That imposes a statutory limitation on the duration of the increased duty and links it by statute to the duration of petrol rationing. Of course, it was always the intention of the Government that the increase should be temporary and should be purely in the context of our present oil difficulties, but hon. Members from various parts of the House expressed a desire that clear statutory effect should be given to that intention and in this we have been very glad to meet the wishes of hon. Members.

On the generality of the Measure, my right hon. Friend the Chancellor said, on Second Reading on Monday, that he did not expect this proposal to be popular. Nevertheless, he claimed—I think with justice—that the majority of people understand the reasons behind the proposal and think them sound. [Interruption.] The right hon. Member for Smethwick (Mr. Gordon Walker) makes one of his sedentary interpositions but I am sure that the House will agree with this political proposition: Governments take action they know to be unpopular only if they are convinced that they are absolutely necessary in the public interest.

That is certainly the case in this context. The Government thought that it was necessary in the public interest to introduce this Measure having regard to the shortage of oil in present circumstances, to the loss of revenue and in the general context of the adverse effect on our balance of payments position and prospects of recent international events provoked by Colonel Nasser's seizure of the Suez Canal.

Mr. Ernest Davies (Enfield, East)

Provoked by Her Majesty's Government.

Mr. Walker-Smith

The wisdom of our proceedings and the confirmation of my right hon. Friend's judgment is to be found, in addition to other places, in the authoritative columns of the Economist, which said this about the Measure in its issue of 8th December.

Mr. John Rankin (Glasgow, Govan)

The hon. and learned Gentleman should have read the previous issues.

Mr. Walker-Smith

I would rather have a contemporary justification than any past evidence to pray in aid.

Mr. Rankin

The hon. and learned Gentleman has neither.

Mr. Walker-Smith

The hon. Member says that I have neither, but long experience of him in this House has drawn me to the regrettable but inevitable conclusion that he is by no means always right in the opinions he advances.

The Economist stated: There was a strong case for accompanying petrol rationing by coupon with petrol rationing by price an apology is due to the Chancellor from those who did not believe he would he politically brave enough to do this. A great deal of nonsense has been talked about the effect of this increase on the cost of living. Any indirect tax can only add to the cost of living by the amount of that tax; either it adds to it all in one place, or else—as with the petrol tax—the cost is admirably widely, and therefore thinly, spread".

Mr. Frank MeLeavy (Bradford, East)

Does the hon. and learned Gentleman accept that Press statement? If he does he is wrong.

Mr. Walker-Smith

On the contrary, I always feel a degree of economic rectitude when any proposal with which I am associated is endorsed in the columns of the Economist. I have no doubt that the judgment of the Economist is right about the impact on the cost of living. We have debated at length already this week the extent of the impact of the petrol duty and the increased commercial price on the cost of living. I believe that the evidence justifies up to the hilt the conclusion authoritatively drawn by the Economist in the passage I have just quoted.

Mr. Gordon Walker

Is there not a simple fallacy in the Economist argument in that so many people tend to round off to the nearest Id. or 6d., or whatever it may be, the fractional increase in cost to be caused to their particular commodities by this tax, which will be considerably larger than the actual revenue which the Government will derive from the tax?

Mr. Walker-Smith

I am sure we shall have the co-operation of the right hon. Member in reprobating any such tendencies, which clearly are a very rough and ready method of proceeding and which seem to have no justification in the facts of the case.

Mr. Chetwynd

How can one put up a 3d. fare by one-fifth of a 1d.?

Mr. Walker-Smith

The hon. Member knows that the fares provisions are set out in Clause 2 of the Bill. He will know, for example, how that matter has been dealt with by London Transport Executive. The net effect is that the Executive's increase is appreciably lower than the maximum permitted it by Clause 2.

I am sure that the House will be at one with me in saying that the impact on the cost of living should be viewed objectively, as a matter not of dialectics but of measurement where measurement is possible and objective assessment where precise measurement in the nature of the case is not possible. We have sought to measure the direct results both in regard to private motoring and buses both for tile duty and for the price increase. We have assessed the indirect results in respect of the element of transport costs, for the carriage of goods. Those figures have been given to the House by my right hon. Friend the Chancellor on Second Reading and were given by me at Question Time on Tuesday this week.

The short point is that we are here concerned cumulatively only with a fraction of a point in the cost-of-living index. Therefore, I submit that on that objective assessment we are justified in making the conclusion—indeed, it is the only conclusion that can be maintained—that the impact on the cost of living is at once small, evenly spread and temporary in nature.

That being so, there is no basis for the possibility of inflationary pressures arising. which some hon. Members have seemed to apprehend. It would, of course, be possible, but, equally, it would be quite wrong and reprehensible to, as it were, take ourselves into a psychology of inflation in this context when the facts and figures show there is no justification for doing so.

In conclusion, I say the increase in the duty is linked, and now statutorily linked, to the duration of petrol rationing. Both those things, the increase in duty and petrol rationing, are temporary. Both are unwelcome, but both are appropriate and inevitable in present circumstances. We hope that the duration of both of them will be short and, as far as the Government are concerned, we will do all that lies in our power to see that that is so.

Mr. William Ross (Kilmarnock)

The hon. and learned Gentleman quoted a Scottish proverb yesterday. I just forget could he tell us what it was?

Mr. Walker-Smith

Now that Mr. Speaker is in the Chair. I have some hesitation in pronouncing it, but I think it is. "Mony a mickle maks a muckle".

4.10 p.m.

Mr. Ernest Davies

I fully understand why the Economic Secretary was so brief in moving the Third Reading of the Bill. The brevity with which he moved it was in direct contrast with the rush with which the Bill has passed through its various stages. But now that the Chancellor has surrendered to the pressure from these benches, and also to that from his own back benchers, who staged a second Suez revolt, as it were, during Second Reading, although, admittedly, that revolt was in a better cause than that which came from the right hon. and gallant Member for Leicester, South-East (Captain Waterhouse), and since the Chancellor has written "temporary" into the Bill as well as putting it in its Title, it seems to me ludicrous that the Bill should have been presented to this House and that the House should have been compelled to spend three Parliamentary days upon it. Those days could have been far better spent in other debates—for instance, in a debate on Hungary, the question of which was raised earlier this afternoon.

The Bill is now in a form whereby petrol rationing is, as the Economic Secretary pointed out, linked with the end of this additional tax. It is for a temporary period, which the Chancellor himself, in parenthesis in his speech on Second Reading, suggested might be for four or five months. This temporary measure is for the purpose of raising revenue of only £30 million. In view of the dislocation and inconvenience which this increase in the tax on fuel oil will bring about, it is questionable whether the Bill was worth while introducing and whether it is justified.

The Chancellor himself, during his statement on the economic situation on 4th December. stated that the overall out-turn of the Budget will be no better and no worse than he forecast in April. In other words, he still anticipates that the Budget will fulfil his expectations; and the expectation, of course, is that the Budget will have an overall surplus of a considerable amount. In view of that, is it necessary that this dislocation and inconvenience should be caused simply to bring in this extra £30 million to recoup the loss of revenue which the Suez misadventure has caused? To recoup the loss of revenue an additional burden is to be imposed upon the whole community, a burden which, despite what the Economic Secretary said, will bring about a rise in the cost of living and will affect the position of every member of the community.

The tax which is being increased is one which has a greater incidence on the cost of living than most other indirect taxation. It increases the cost of transport directly as far as road passenger travel is concerned and thereby it has a direct effect upon the expenditure of the whole community. About 90 per cent. of passenger travel today is estimated to be essential travel. In other words, the amount of travel which is optional is very small compared with that which is essential.

People who travel to and from work daily have to pay out their pence or shillings every day and any increase mounts up in a matter of weeks or months and substantially within the year. The increased tax will bring hardship to a considerable number of workers, but it also affects indirectly the cost of manufacture and of distribution, because the increase in transport costs is imposed upon every process of manufacture and distribution in which transport is involved. This accumulates, snowballs, as it were, and the effect is considerable.

When the Economic Secretary suggests that the impact on the cost of living is small, thinly spread and temporary as he did this afternoon, I would certainly say that that is open to question. The amount will not be small when the cumulative effect is taken into consideration. The money which is paid out daily by those who travel and the extra cost of all commodities into which the cost of transport enters will not be small, nor is it thinly spread. It is spread over the whole of the community and it is considerable.

Nor do I accept the Economic Secretary's claim that the increase will be temporary. The increase in tax, we are told, is to be temporary, but does the Economic Secretary really believe that the increases in fares and in the cost of road transport and in a large number of commodities will disappear as soon as petrol rationing and the additional tax comes to an end? Of course it will not. Our experience has always been that once prices are raised they do not come down. There are exceptions, but it is very difficult to accept that there is any likelihood of these fares and transport costs and the costs of commodities declining as soon as the increased tax comes to an end.

As far as road transport is concerned, the increase of the 1s. in the tax, under Clause 1, comes on top of difficulties with which the transport industry was already faced. Now with the higher price of petrol—

Mr. Walker-Smith

I am not sure how the hon. Gentleman reconciles what he says about fares with the provisions of Clause 2 (4) of the Bill.

Mr. Davies

If the Economic Secretary exercises his customary patience, I was going to deal with that aspect before I finished my remarks.

The road transport industry is already dislocated by, first, the introduction of rationing, and secondly, by the higher price of petrol, by the 5d. imposed by the petroleum companies. The fact that the ration for the goods transport undertakings is only a basic ration of 40 per cent. of their normal consumption—in addition, a certain supplementary allowance will be provided if need is proved—will cause considerable muddle and confusion in the industry. The smaller mileage, and, therefore, the lower traffics which will be carried, is bound to reduce the profits of the operators.

In most cases, charges in the industry would have gone up in any event, whether this increased tax had been imposed or not. In some cases it might have been absorbed, but the costs would not have had to rise anything like as much as they will have to rise, or have risen already, as a result of the tax. It is interesting to note that in the case of the nationalised British Road Services, the increase, so far, is 7½ per cent. In the case of the private hauliers, the increase is higher, at 10 per cent.

It is quite clear that the larger organisation, operating on a large scale and with its common ownership with the railways, by being able to organise the transport of its goods and parcels by rail containers, by the transfer of a certain amount of its trunk haulage also to the railways, and by organising rail heads and the like, is able to operate on a more economic basis, and can reorganise the carriage of its traffics so that it has not to put up its charges to the same extent as have private enterprise organisations.

As was pointed out by the hon. Member for The Isle of Thanet (Mr. Rees-Davies) yesterday, the position of the private hauliers is very serious. He stated: It stems 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 … He went on: The vital fact is that unless the road hauliers can got approximately 80 per cent. of their normal petrol requirements, anything less will mean that they will immediately he facing a severe loss."—[OFFICIAL REPORT, 12th December. 1956; Vol. 562, c. 496.] One cannot help but reflect that by putting this extra shilling tax on these private road hauliers, the Government are putting into queer street these very persons whom they were going to help come back into the industry with denationalisation. The Economic Secretary will recall that special action was taken by the Government to relax hire-purchase agreements so that the private hauliers could borrow on easy terms from Mr. Gibson Jarvie, and come back into the industry.

Now, those very hauliers—because of this increased tax, and because they have this burden of liability around their necks—are faced with a very difficult situation. I cannot help feeling that some of them must be regretting that this freedom to re-enter the industry was so generously given to them by the Tory Government. They must wonder whether their share in this property-owning democracy is worth having.

It is true that the increased tax must end with rationing—it must now end within one month of that event—but with the higher fuel prices, and with these losses which private enterprise hauliers now face, can hon. Members really think that these increased charges of up to 10 per cent. will come down? Does it not mean that the higher tax is temporary, but that the higher charges are permanent?

I should now like to turn to the road passenger side of the industry, and to Clause 2. When I asked the Chancellor whether he would exempt public service vehicles from the increased tax, he replied: No, Sir. I could not do that. One of the reasons, of course, is that that quantity of the oil which we most want to preserve is the one which would be most used—derv."—[OFFICIAL REPORT, 4th December. 1956; Vol. 561. c. 1066.] That was the most extraordinary reason given by the Chancellor for imposing the extra 1s. tax. It was the first indication we had that the tax was put on to discourage the use of motor fuel by public transport. After all, under the petrol restriction scheme, public transport consumption is restricted by 10 per cent. Its total consumption has been fixed at 10 per cent. less than normal. Surely, with the rationing of petrol for private motoring, it cannot be expected that public transport can cut down its services to such an extent that it can save further fuel in order to reduce its costs.

In other words, it cannot be the policy of the Government to put on this extra tax, as the Chancellor suggested, to discourage the use of public transport and thereby enable it to cut down its full consumption. It is quite clear that this was a typically confused remark of the Chancellor's which was quite contrary to the original purpose as explained by him and by subsequent speakers, which was to recoup the Revenue of the £30 million of which the Government's own folly has deprived them.

Clause 2 provides special procedure for road transport undertakings to increase their charges. These undertakings, like the goods undertakings, are already in some difficulty. They were already in difficulty because of rising wage and material costs, and because of some falling off in traffics. A large number of unremunerative services have long been in danger—some have been cut out. Clause 2 plays havoc with the normal procedure for fixing fares, and interferes with the pattern of transport which has emerged from the control which has been exercised for some 25 years by the Traffic Commissioners under the 1930 Act.

Section 72 of the 1930 Act provides that in considering the granting of road service licences to bus and coach operators, a very large number of factors shall be taken into account, of which fares is only one. The keeping in operation of unremunerative services, the running of necessary services with adequate frequencies and the rest, are all part of the general transport pattern which is taken into account when fares are fixed by the Traffic Commissioners.

Unfortunately, as the Traffic Commissioners are now by-passed by this Clause, it is left, for the time being, to operators to fix their own fares so as to compensate them for the increased cost of the fuel tax. I have some fear that, as a result of this, the traffic pattern will be interfered with, and the operators will do those things which the commissioners have taken such care to prevent them from doing in the past.

For instance, the Commissioners decide which fares shall go up, which shall go down, or which shall remain at the same level. In the case of concessionary fares—particularly workmen's fares—the Commissioners have exercised considerable influence. In my view, there is certainly the possibility, and, equally, the danger, that, as a consequence, the private enterprise operators will take advantage of that freedom, temporarily given to them, to impose the incidence of the increased fares in precisely those places where they have been endeavouring to impose it in the past, but have been prevented from so doing by the commissioners. That is to say, there is the danger that workmen's fares will be brought to an end in places where the operators have been endeavouring to abolish them but have previously been prevented by the Commissioners.

It is pertinent to point out that in relation to those companies which are controlled by the British Transport Commission, the public has the right to appeal to transport users' consultative committees. In the case of those companies which are not controlled by the B.T.C., but by private enterprise, there is no such right of appeal by the public to those committees concerning complaints about services, fares, and the like.

That is important, because the Traffic Commissioners have, in the past, been the only protection which the public has enjoyed against exploitation by private enterprise companies. The traffic commissioners have exercised this power in return, as it were, for the monopoly rights which the private enterprise operators have. Therefore, there is some danger in the elimination of the Traffic Commissioners, albeit temporarily, that the private enterprise undertakings will take advantage of the situation. I referred to this last night and the Minister of Transport and Civil Aviation, who replied, I regret to say, was unable to give a satisfactory assurance on that point.

On the question of the raising of fares, there is still some confusion as to what exactly the permitted increase of 1d. in the 1s., or 1d. in 8d. so far as the smaller undertakings, largely the rural services, are concerned, is intended to cover. If one interprets the Bill literally, it says quite categorically that the increase has to cover the increase in tax, but the Chancellor, in the Second Reading debate, said: The intention, therefore, is 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—that is, the increase in price—should be met with special legislation, special methods and quite separately from the normal control of charges."—[OFFICIAL REPORT, 10th December, 1956; Vol. 562, c. 45.] That is, that this procedure under Clause 2, according to the Chancellor, was to cover not only the increase in tax but also the increase in the price of petrol and other increased costs owing to the special emergency.

That is not how the Bill reads if it is literally interpreted. The Minister of Transport and Civil Aviation stated, last night: I am afraid that this increase must cover not only the increased tax but the increased cost of fuel."— That confirms what the Chancellor said. Transport undertakings must try to make up the extra cost out of savings which they hope to make by better load factors and more passengers. That contradicts his first statement. There is no intention to apply for increased fares arising from the increased cost of fuel during the emergency period. So it does appear, according to both the Chancellor and the Minister of Transport and Civil Aviation, although the latter is more muddled even than the Chancellor—and that takes some doing—that the increase up to the maximum has to cover both the increase in tax and any increased costs.

I refer to that because these increased costs will remain. The increased tax is coming off; but will these increased costs disappear? Will the 5d. addition to the price of petrol and derv disappear with the end of rationing and the increased tax? I doubt that very much indeed. The importance of this is that when the tax increase ends the special procedure to which the Economic Secretary referred in his interjection comes into play. Then the undertakings either bring the increased fares to an end, or they apply to the Transport Tribunal in the case of British Transport or to the Traffic Commissioners in the case of the other undertakings and claim that for "special reasons", which are the words in the Bill, they should continue these higher charges in operation.

Is it not obvious that most undertakings will claim that their increased costs, following the higher price of petrol and derv and other increases which may have taken place in the meantime, will justify the continuance of these higher fares? Surely that is most likely to be the case and that the "special reasons" will be brought into play to justify the continuation of the higher fares.

Mr. Walker-Smith

The reason why I ventured to interject during the hon. Gentleman's speech was that he was giving the House the impression that there was a possibility of these fares, instituted under this emergency machinery and without examination by the Transport Commissioners continuing after the duty had gone. I think that the hon. Gentleman will admit that it is quite clear from Clause 2 (4), to which he has referred, that this will not and cannot be the case.

Mr. Davies

No, but what can be the case, as I was trying to explain, is that as soon as the increased tax comes to an end, then either the undertakings reduce their fares to the original amount or they apply, under Clause 2 (4), to the Transport Tribunal or the Traffic Commissioners, whichever is relevant, and say that for "special reasons" they wish to continue the higher fares. Then the Transport Tribunal or the Traffic Commissioners have to examine the situation and give their ruling. It is true that they come back into the picture and provide a measure of protection, but what I am trying to explain is that, in my view, the temporary nature of the increase in fares is not likely to be comparable with the temporary increase of the tax.

What is the purpose of all this? What is the purpose of this dislocation of the whole procedure of fixing fares and imposing this hardship upon the whole community? What is the result of it? The purpose is and the result is to raise a paltry £4 million during the rest of the current financial year. In other words. the system which has been built up over the last twenty-five years, and which has become the basis of protection of the transport system, is being set aside. The whole of the travelling public will have to pay higher fares, at least for a period and probably for very much longer than the temporary period, simply for the sake of bringing into the Exchequer £4 million during the rest of the current financial year.

Is it really necessary? Is it really worth while to impose this burden and inconvenience for the sake of a mere £4 million, when one looks at the size of the Budget and the fact that the Chancellor is confident that he will end the financial year with a very considerable balance? This rationing, combined with the tax and higher fuel prices, is leading to chaotic conditions in the road haulage industry, which was already dislocated by the Government's transport policy. It is upsetting the pattern of control of the road passenger transport industry and imposing a considerable burden upon the travelling public. In the case of the British Transport Commission alone, the extra cost of the tax and the extra cost of petrol will be at the rate of about £8 million a year. That is the measure of the burden on this nationalised concern.

This Bill results directly from the Suez fiasco. It is a poor attempt to recoup the Treasury by a fraction of the total cost that that misadventure entailed. To raise the £30 million lost as a result of an oil shortage brought about by the Government's own piece of incredible folly, a fresh burden is imposed upon the travelling public and upon all users of road transport. It causes a rise in the cost of living with all its inflationary effects, 3n spite of the Economic Secretarys' remarks. The effects are inflationary because of the cumulative effect of the higher transport charges and the inevitability of claims for higher wages.

This is a most unintelligent and trivial way of attempting to deal with the serious economic consequences of Suez. This is a pointless Bill, the financial gain from which is in inverse ratio to the inconveniences and dislocation which it causes. As we believe that the Bill is bad and should be dropped, we shall have no alternative but to divide against it on Third Reading.

4.41 p.m.

Sir R. Cary

The hon. Member for Enfield, East (Mr. Ernest Davies) has raised a most important aspect of the Bill. It arises on Clause 2. I tried on Second Reading to make this case myself. It is important to bear in mind the impact of this duty on the road operating services and, in particular, on the road passenger services, so far as it affects the present structure of negotiations for fare increases in order to meet wage demands and increased operating costs.

If my hon. and learned Friend the Economic Secretary would look at this new tax quite separately, divorced from the background against which it is imposed, one would not have much complaint. Almost every increase in expenditure has an inflationary incidence. I believe that inflation has been going on for generations. One can go back to a time when 1d. bought an immense amount which would require shillings and sometimes pounds to buy today. It seems that inflation is a natural trend which goes on the whole time. What we have to strive to do is to control that incidence, and become its master instead of allowing it to master us. That seems to me to be the secret of economic leadership. It has now become, in the critical circumstances of this country, the secret of leadership from the Government Front Bench.

Mr. Rankin

Which we are not getting.

Sir R. Cary

I should like notice of that.

In short the hon. Member for Enfield, East is quite right in laying stress on the difficulty which will now confront not only the managers of the corporation fleets and the directors of the independent operating fleets, but even the Traffic Commissioners themselves, who have to decide these matters.

On Second Reading I referred to a company of which I am privileged to be a director, Lancashire United Transport. There are good links between Lancashire and Wales, and perhaps I might be forgiven by any hon. Member who sits for Wales if I cite an example of what is happening in that country. I noticed a report in the Daily Express this morning. It sent two reporters to cross-examine the companies in South Wales on the impact of this tax and they reported as follows: All the companies in South Wales will put a halfpenny on single fares up to 5½d. and a penny on those between 6d. and 2s. to cover Increased running costs. The three major companies in the area have already applied to the licensing authority for fare increases to cover a wage award to bus crews made in November. These will be heard early in the New Year. 'This application will still go ahead in spite of the fare increases coming in next Monday' said a spokesman …"; The difficulty of imposing a new, unpredictable and inane tax like this, which by itself might be slight, is that yet another burden is placed upon the passengers in addition to perfectly legitimate fare structure claims made by the corporations and directors to meet either wage claims or the increasing incidence of operating costs.

I do not think the House appreciates the difficulties of the operating side of the transport industry arising from the increase in operating costs. The effect is such that I expect that in a year or two, or perhaps in three years' time, some of our operating fleets may be in considerable difficulties. A fleet which is operated by the City of Cardiff has incurred a deficit during the last three or four years, and only in the last financial year has it made a small profit of £8,000 or £9,000. Of course, that will be swallowed up in increased costs.

On Second Reading, as reported in the OFFICIAL REPORT of 10th December, at col. 63, I said that Lancashire United Transport had granted a wage demand of 5s. and that we were proposing to try to meet that out of the company's economies. I find on further examination that no such thing is now possible. Having revised my opinion, I believe that my company will almost certainly seek the aid of the Traffic Commissioners in order to provide that 5s. wage increase which was given in November last.

I agree with that part of the Bill which provides that when the emergency is over, the additional tax will lapse, but, as I have said before. I hope that if it should lapse, say, on the fifth of the month the Treasury will not wait until the end of the month before making an order, and that these additional charges, slight though they may be, will be dropped as soon as this emergency is over.

There arise on the Bill many matters which would be best discussed in the debate on economic affairs on Thursday next week. Therefore, I will not delay the House any longer on the Bill. I am grateful to the Government for the speed with which they have brought the Bill before the House. I wish to express my gratitude again to the Economic Secretary for the gesture which has been made with regard to the timing, and I hope—we are all in this together—that this emergency will end as soon as possible.

4.49 p.m.

Mr. John Cronin (Loughborough)

I fear that I cannot entirely agree with the hon. Member for Withington (Sir R. Cary) in thanking the Government for the speed with which they have introduced this Measure. It seems to me to suggest a somewhat indecent haste, as though there were something furtive about it. I had hoped that the Economic Secretary would have had the grace to adopt an apologetic mien when he said that the Second Reading was only 72 hours ago, but his own speech was of sufficient brevity to indicate that he felt, at least internally, shamefaced.

The hon. and learned Gentleman gave various reasons why he lauded this Bill to which we are giving a Third Reading this afternoon. He made a particular point, as have all his predecessors, of saying that it will make a very small difference to the cost of living, particularly the cost-of-living index. It is high time that the Government realised that they are governing human beings, not indices. There is nothing more fallacious than this cost-of-living index; it is based upon a mean which does not exist in reality, and it is entirely a theoretical conception. The unfortunate people who have to pay extra fares, the unfortunate housewives who have to pay more for their purchases, do not think of cost-of-living indices but think entirely in terms of what comes out of their pockets. I wish the Government would realise that.

The Economic Secretary quoted the Economist to assist his argument. He said that the Economist stated that the cost of living would increase as a result of this Bill only by the total amount of the tax receipts. This is a somewhat jejune statement, even from the Economist, because it ignores entirely the system of trading in this country. The wholesaler makes a profit, which is a percentage of what he pays out, and the retailer makes a further percentage. Those percentages will be based on increased transport costs, so that there will be a considerable price rise greatly in excess of the actual increase in tax receipts drawn by the Exchequer.

The Economic Secretary emphasised that the Bill is going to have an entirely temporary effect. We on this side of the House are not entirely reassured by this suggestion. He gave, as two of the reasons for the Bill, that there would be a loss of revenue to be made up and there is a balance of payments situation to be dealt with. As far as loss of revenue goes, we understand from a quite unprecedented statement by the Chancellor of the Exchequer that there will be an increase of Income Tax in three months' time.

Mr. Rankin

Is that so?

Mr. Cronin

Yes.

Mr. Walker-Smith

If the hon. Gentleman the Member for Loughborough (Mr. Cronin) is going to make that sort of remark, he ought to be careful to quote the precise words of my right hon. Friend's statement in that regard on 4th December.

Mr. Cronin

Like most hon. Members of this House, I hang on the lips of the Chancellor of the Exchequer, but not to the extent of memorising every word he says.

Mr. Walker-Smith

Would the hon. Gentleman not agree that it is a prudent precaution, before making a quotation, that one should check it?

Mr. Cronin

I was not making a quotation.

Mr. Deputy-Speaker (Sir Charles Mac-Andrew)

This is very interesting, but it has nothing to do with the Bill.

Mr. Cronin

May I say in my defence. Sir Charles, it being an important matter from the point of view of precedent in the House, that I was not making a quotation; it was merely a piece of oratio obliqua.

The Economic Secretary said that the Bill was to be temporary. I suggest it is quite fallacious that our future oil difficulties are going to be due only to the physical obstruction of the Suez Canal. We must bear in mind that most of our oil resources are in the safe keeping of Arab nations who now have very little reason to be pleased with us.

In suggesting that this oil shortage was going to be temporary, the Economic Secretary is, in my view, going a little ahead of what one can reasonably achieve by mental calculation. We know the hon. and learned Gentleman is a very clever and able person, but I feel that we are entitled to have legitimate doubts about his powers of clairvoyance.

Mr. W. R. Williams (Manchester, Openshaw)

Is my hon. Friend aware that the Treasury's interpretation of "temporary" might be very different from his own, and from ours? The Excise Duty itself was a "temporary" Measure.

Mr. Rankin

So was Income Tax.

Mr. Cronin

I am obliged to my hon. Friends for reinforcing my argument.

Returning to the subject of Clause 1, we have heard a great deal about its effect on motorists and road travellers, but I am concerned to emphasise its effect on the road transport industry of the nation. Every progressive nation tries to increase the efficiency of its road transport. One of the most important objects is to make road transport cheaper. The actual effect of Clause 1 will, quite simply, be to increase transport costs on all raw materials coming into the country and on all finished products going out of the country for export.

Exactly the same effect could be achieved, if the Treasury wished to raise transport costs, by employing large numbers of men to use picks and dig holes in the roads. There are many ways in which transport costs could be increased. I suggest it is a most retrograde step to impede our industrial resources by increasing these costs. We are thereby giving our competitors abroad a very helpful advantage.

The effect of the Bill on the motor industry itself, of course, is calamitous in every possible way. The motor vehicle manufacturing industry is, as everyone knows, now laying off very large numbers of its workers and greatly diminishing production. But apart from the immediate effect in the motor industry, there is the long-term effect. There will be a tendency, during the next few months, for cars to be designed for the purpose of economising on petrol. Most hon. Members will remember how, in the inter-war years, there was a tendency to keep cars small so that they would be able to avoid the quite absurd horsepower tax. This Bill will have the same effect; there will be a tendency to keep cars small in order to economise on petrol. This again will give a very great advantage to foreign competitors who do not have to think about such things.

The effect on the retail side of the motor industry is equally disastrous. Retailers of new cars are in a very difficult position, but the retailer of secondhand cars is in desperate straits. Any retailer who has a car of large horsepower or high petrol consumption has very little he can do with it except drive it to a rubbish dump and leave it there; there is now simply no sale at all for any large horse-power car as a result of the practical and psychological effects of the Bill.

Some attention should be paid also to the unfortunate business men and industrialists who are trying to maintain this country's balance of trade. Every year they have more frequently to make calculations as to costs, profits and prices, and continually these calculations are upset by the present Government in making constant changes in taxation. if only people knew that this would be a regular feature—if we could have a Finance (No. 3) Bill instead of this furtive insertion of the Hydrocarbon Oil Duties (Temporary Increase) Bill—people would know exactly where they were and be able to make their calculations. Instead, we have this appallingly unsatisfactory state of affairs.

Clause 1 will also have a deleterious effect on the tourist trade. Many people from across the Channel and elsewhere abroad would normally be attracted to this country by the comparative cheapness of petrol. As a result of the Bill that differential will disappear and there will be less likelihood of people crossing the Channel to tour this country by car.

This is a regressive tax and a tax on a commodity which affects every member of the community to a great or lesser extent. When I say "to a greater or lesser extent" I emphasise that the tax will chiefly affect people of the lower income groups. It may seem obvious, at first, that the tax will chiefly affect people with their own cars, who buy petrol for solitary journeys or for journeys for themselves and their families, but it must be remembered that the majority of cars which are taxed in this country are run by professional or commercial people and the expense counts against their incomes for Income Tax purposes. The richer a man is, the more Surtax he pays, the less he will be affected by this tax. The unfortunate people who will be most affected are those who are dependent on public transport and travel by bus. The effect of the tax seems to be the very opposite of what good taxation should achieve. It is a most regressive and undesirable tax.

In Clause 2 (4) there is a provision to enable fares to be continued at a raised rate. My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) touched on this matter. As the Bill is drafted, it seems possible for raised fares resulting from the Bill to be continued indefinitely, even though the tax is later removed from hydrocarbon oils.

I think there is an important constitutional principle involved. It is unattractive that legislation should be delegated in this manner. We in the House are accustomed to the idea that legislation is delegated to Ministers to save the time of the House, but in Clause 2 (4) we find legislation delegated to traffic commissioners and transport tribunals, for London at any rate. This seems to me to be a highly undesirable constitutional principle. The Economic Secretary is wrinkling his brows over this. I hope he will study this subsection more closely to see what I mean.

I suggest that the Bill is enormously unpopular in the country and in the House. It is noteworthy that the only hon. Members who have spoken well of it are the Chancellor of the Exchequer and his two close assistants, the Economic Secretary and the Financial Secretary.

Mr. Rankin

Two yes-men.

Mr. Cronin

It is particularly noticeable that hon. Members have had the grace to leave the other side of the House comparatively empty. It is quite clear that the Bill is most unpopular with the Government side of the House. It is certainly detested on this side of the House and regarded by the rest of the country as a calamity.

5.4 p.m.

Mr. Rankin (Glasgow, Govan)

I think it can fairly be said that although the Bill may be a small Bill it is nevertheless a shattering indictment of Tory policy during the last few months. It is also, in my view, a reflection of the desperate straits to which the Government have been reduced on the oil and petrol situation, because it appears that, despite the long preparations which they made for the war in Egypt, they did not take the necessary precautions to safeguard the oil stocks of this country. That is the reason for the rigorous nature of the scheme which they are compelled to impose.

I should like to place the Bill against the background which the Chancellor painted when playing the part of "Doctor in the House" a week ago last Tuesday.

Mr. Cronin

"Doctor at Sea."

Mr. Rankin

Perhaps that is a better description.

He made a very close examination of the patient after the mishandling he has had over the last few months and came to the conclusion that his reserves were very seriously depleted. His pipelines were completely blocked and because of that a new passage would have to be made in another direction. This indicated the very serious condition to which the patient had been reduced. The doctor said that in order to expedite his recovery he would need to reduce the patient's internal demands. On this side of the House, I think, we might have suggested less Tory cooking and the removal of Suez pudding from his diet.

It is in the light of the doctor's diagnosis that the patient's internal demand must be reduced, I take it, that this little Bill has been introduced. The prescribed bottle will say "Two tablespoonfuls, according to doctor's orders," and, to put temptation further away from the patient, the price of the bottle is to be increased.

The strange thing, as we on this side of the House have been trying to show, is that the Bill will not reduce internal demand or restrain it. It will increase internal demand. The Bill is brought in at a time when the cost of living is being forced up by the Government in a number of different directions—rents, the withdrawal of subsidies, the increase in fares for transport. These imposts, in addition to that imposed by the Bill, will result, cumulatively, not in restraining demand but in increasing it. They are bound to have an inflationary effect of the kind which the Chancellor ought to be seeking to control or resist at this time.

As hon. Members have indicated, many of us have had protests about the effects of the Bill on the wages of our constituents. Yesterday I had a detailed protest from a taxi-cab man in my division. This Bill will place him and many more of my constituents in very serious financial straits. We are told in the Bill that that will be remedied because the taxi-cab man in my division and others like him throughout the country will be able to charge 6d. more on every journey, which, it is claimed, will safeguard their position.

At the same time, the Minister of Fuel and Power refuses to give them enough petrol for their cabs to earn sufficient extra sixpences. We are told that he will make these new allocations for them as quickly as he possibly can, but we have no indication yet when that will be. These men are going to suffer financially at a time when the cost of living is rising against them. The Government's excuse is that the taxi drivers will get sixpence more for every journey, but there is no guarantee that they will he able to run their cabs sufficiently often to earn the additional money.

It would be wrong of me, as a Scottish Member, although, of course, speaking for an English interest, too, to allow this Bill to go through without making at least a passing reference to the effects the Bill will have on our oil industry in Scotland; effects about which a very vigorous protest has been made from this side of the House. I would point out to hon. Members on both sides of the House that this is not a peculiarly Scottish grievance because in Nottinghamshire, too, there is an oil industry, which will be affected by the Bill similarly to Scotland's shale oil industry. I believe that there is an oil industry in Kent, too.

I do not know how active the oil industry is in Nottinghamshire or in Kent. Nevertheless, the oilfields we have at home ought to be carefully nursed and not handicapped more than is necessary. The Treasury is handicapping them by the infliction of this Is. tax. To do this now, to put this extra tax on the oil industry of the Lothians, of Nottinghamshire or of Kent, is completely wrong. It is without sense.

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

How can my hon. Friend expect this Government to have any sense?

Mr. Rankin

I would try to encourage them to be sensible. If they have no sense, my effort will be futile. I hope they have a few drops of sense and my words may sink in.

When a thirsty man is travelling in the desert and comes across a place where there are a few drops of water, he does not say they are of no use to him because there are only a few. He carefully tries to save them. The Government are saying that because there are, as it were, only a few drops of oil coming from our own oil industry they are valueless. They say they are too small to take note of, or they think themselves too big to take note of them. Instead of casting those drops aside, the Government should try to squeeze every possible drop out of the industry to help us in the predicament which the Chancellor acknowledges we are in.

Instead, he imposes this handicap of the extra 1s. tax on an industry which is already handicapped. If the Government think this industry has little to contribute to help to meet the immediate needs of the country or its long-term needs, let them be honest about it. Even if they have no sense, as my hon. Friend the Member for Edinburgh, East (Mr. Willis) suggests, we hope that there is at least some honesty among them. If there is, they should have told us yesterday that this industry is of little consequence to Scotland and the United Kingdom, that it has no contribution to make to our economic well-being and that they intend to destroy it. They have no intention of helping it so that it can make, as I am certain it can, a significant contribution to the economic well-being of the country.

You will realise, Mr. Deputy-Speaker, from what I have said that I do not think much of this Bill.

Sir R. Cary

We had our suspicions.

Mr. Rankin

I am glad I have confirmed the suspicions. I had the same suspicion about the hon. Baronet the Member for Withington (Sir R. Cary). Seeing that we are both suspicious of the Bill, I hope that when I go into the Division Lobby tonight against it the hon. Baronet will follow me.

5.15 p.m.

Mr. Chetwynd (Stockton-on-Tees)

I agree with one of the remarks of the hon. Baronet the Member for Manchester, Withington (Sir R. Cary) that we are all in this together. That is the unfortunate thing about it. It is unfortunate that the just and the unjust are having to suffer alike in this adventure. I realise why the Chancellor of the Exchequer, and even his lieutenants, the Financial Secretary and the Economic Secretary, are so reluctant to defend the Bill. After all, it is a child of the Suez Group. It has little to do with the Chancellor and his lieutenants. As a child of the Suez Group it bears all the same distinguishing features which that ill-starred adventure bore. The Bill has not been thought out by the Government to its logical consequence any more than was that adventure. The Government have not seen where they are going or whither the Bill will lead them.

There are some questions, the answers to which the whole country wants to know, which I would ask the Financial Secretary. First, how long is "temporary"? I suppose one may as well ask how long is a piece of string as hope to get an answer to that question from the Financial Secretary, but it is important that we should have some idea of what the Government think about temporary, and of how long they think it is. The ration tickets, I understand, are for four months. Many people optimistically believe that rationing will end when the first book is exhausted. Can we have any crumb of comfort for them tonight?

This tax is linked with the supply of petrol. The supply can come through the Suez Canal when it is cleared; it can come round the Cape; it can come through the broken pipelines when they are repaired, and some can come from the United States of America. What we really ought to be talking about tonight is the prospects of the repair of the pipelines. For instance, how long will it take before the normal flow of the supply is resumed? How long, on the most optimistic estimate, is it likely to be before tankers go through Suez? Will it be four months, or six months or not for a year? How long will it take to get an adequate supply coming round the Cape? How long will it take to make the fullest use of the tankers which are now available, coming round the Cape? How far are the Government prepared to go in the expenditure of dollars on the purchase of American petrol to make up our deficit? On the answers to these questions depends the reckoning of how long "temporary" is likely to be.

At what level do the Government think our stocks of petrol should be before they take off rationing? Are the stocks to be equal only to what we had before, or sufficient to ensure the same use of petrol as before? Are the Government going to build up a reserve, or are they hoping that we can operate on 90 per cent. of the stock we had before? At the beginning of these difficulties we were operating on a 10 per cent. cut. When the petrol supplies are 90 per cent. of what they were, do the Government anticipate taking off the tax and abolishing rationing?

I wonder how far the Government have tied rationing to the tax. It may produce embarrassments for them in the future. It may lead them to keep rationing for far longer than they would otherwise have done, in order to make up revenue, and to deal with the balance of payments problem. It may prevent them from buying as much American oil as they would otherwise have done. I am absolutely sure that it would have been better to have provided in the Bill a fixed date, 4th April or whatever date was deemed best. It would have meant that the Government would have had to come to the House again if they wanted to extend the time of its operation. Now we are told that within one month of the end of petrol rationing the tax will go.

I am sure that from the arguments that we have heard from the Government about the small effect that this tax would have on the cost-of-living index many people will be sorry indeed that the Government have seen fit to impose the tax at all. But the Government do not seem to realise the cumulative effect of the tax throughout the whole of our buying and spending. We are not concerned with the cost-of-living index. We are concerned with the standard of living of every individual.

We are told that the 2½d. fare will be the only one that will be affected, but the person who will be most affected by that increase will be the housewife who generally has to do just a 2½d. journey for her shopping, in the London area particularly. Now she will have to pay an extra Id. for the journey there and back every time she goes out shopping. On top of that there will be the indirect effects of passing on the transport charges to the cost of commodities. I am sure that the indirect effects of the tax will be much more far-reaching than the Government have anticipated. They have misunderstood the public reaction to the tax.

Can the Financial Secretary to the Treasury offer any hope to the motoring public that by the summer of next year. when most people are thinking in terms of taking their families on holiday, the rationing will be off? I listened with dismay to the Economic Secretary's argument when he delivered his very brief speech about the effect of this increased tax on the cost of living. He seems to think that all that it will mean will be a pimple on the Chancellor's plateau. [HON. MEMBERS: "Oh."] After all, that is what it boils down to. It is a small rise.

Mr. Douglas Houghton (Sowerby)

On which part of the Chancellor's anatomy is this plateau?

Mr. Chetwynd

This will not be a pimple on the Chancellor's plateau; it will be a considerable carbuncle. I do not know where carbuncles occur, but in any case this Measure will bring about a series of massive eruptions on the plateau which will lead to considerable economic difficulty for the Government. I am absolutely certain that in their heart of hearts the Government must be convinced that this adventure in taxation is just as misguided as the original adventure into Suez.

5.22 p.m.

Sir Jocelyn Lucas (Portsmouth, South)

I do not know whether I shall be out of order in saying this, but in order to save petrol or fuel, the biggest firm of multiple grocers in Portsmouth has sold all its heavy lorries and now has light vans. The firm is now told that it can have no extra rations for any vehicle of under a ton weight holding a C licence. This will make it impossible for the firm to deliver goods.

Mr. Deputy-Speaker

It will be equally impossible for the hon. Baronet to continue with that speech.

5.23 p.m.

Mr. McLeavy (Bradford, East)

I should like to support my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) in his speech following the Economic Secretary on Third Reading. I agree with my hon. Friend that the Bill is unnecessary, unrealistic and in many ways seems to be panic legislation without any very serious thought having been given to its consequences upon the community at large. We have been told—and this has been incorporated in the Bill—when the extra 1s. tax will be discontinued, but we must bear in mind, in considering this extra temporary tax, that whether its duration is a few months or much longer all depends upon the supply of oil and how the international position develops. It could go on for a very considerable time, but however long it may go on, the fact remains that the increases in the cost of living which it will undoubtedly bring about will still be there when the tax has been removed.

The Road Haulage Association has increased its charges by 10 per cent., and British Road Services by 7½ per cent. It is clear that they may be able to take off those extra percentages when the tax is removed, but there will be no possibility of really bringing down the cost of living which has been increased as a result of the tax. The Economic Secretary tried to suggest that the people who were arguing that this will mean an increase in the cost of living were misrepresenting the real effects of the Bill. Everyone knows that in the ordinary business way an increased charge on the road haulage industry is passed down the line to the wholesaler and the distributor, both in the retail and other sections of the industry.

Everybody has to meet the extra 10 per cent. They must adjust their charges accordingly. Some will be careful to make adjustments near the figure. Others will say that this is a glorious opportunity for putting on as much as they can. The sum total will be that when the goods get to the consumer they will be considerably increased in price.

The road passenger transport industry works upon a very small margin of profit. In the main, the people who own shares in the companies in the private sector of the industry are people who are not looking for very high dividends but for a fair and reasonable investment for their money. Generally speaking, I think that the private sector of the passenger transport industry has really tried to play its part in providing a passenger transport service for the country which would meet the community's requirements.

It seems to me unfortunate, therefore, that the Government, in bringing about these proposals, should not have paid due regard to the financial difficulties of these undertakings. It is quite clear, as the hon. Member for Portsmouth, South (Sir J. Lucas) told us, that many of these companies are having difficulties. Applications from the private sector of the passenger transport industry are being considered now by the Traffic Commissioners because of the very heavy financial burdens that are imposed upon the industry.

This 1s. will add a further burden that can be offset by some adjustment without resort to the Traffic Commissioners, but we ought not to try to fool the general public about it. It should be made clear to the public that, even when this 1s. tax upon fuel oil is removed, we shall not return to the rate of fares which applied prior to its introduction. The simple reason is that meanwhile the costs of the industry will rise, and the circumstances that will be created will present a position in which it will not be reasonable or proper to expect that these increased fares should be discontinued.

Taking the municipal undertakings as a typical example, at the present time at least 50 per cent. of those undertakings are facing a deficit, some of them are considerable. They have tried to play the game with the Government. They have tried to keep down the cost of fares in order to keep down the cost of living. Many of them have struggled along with a deficit in their accounts, not merely for a year but for several years, and they find the position is becoming impossible.

That is why I say that, with the increase in the cost of living, with the possible increase in wages to those in their employment and with the increased price of equipment, which is very great, it would be foolish to mislead the general public into believing that, when the extra Is. on fuel oil is withdrawn, we shall revert to the fares that prevailed prior to its introduction.

Frankly, I have never thought that any Government since the war has dealt with the problems of the road transport industry as it should have done. I am making no distinction here between one side of the House and the other. I believe this to be so vital to the economy of our nation and to the well-being of our community that it should receive from Parliament far closer and much more realistic consideration than it has received previously. So whether this tax is of long or short duration, I believe it will be necessary for Parliament to reconsider the basis of taxation for road transport.

This is not the proper time to make any suggestions in that direction, but I am sure that those of us on both sides of the House who are interested in road transport will be able to make representations to the Chancellor at the appropriate time. I regret very much the Economic Secretary should try to brush aside the serious representations of those who have been associated with transport over many long years. We are not irresponsible people. We realise that this tax, both on the passenger and on the road haulage side of transport, will create a higher cost of living than the Treasury seemed to think from an examination of the figures. It has been said that figures can be made to lie, and there is considerable truth in that statement, because one can take a set of figures and read into them what one wishes. Yet those of us who have had to deal with the hard facts of the road transport industry know very well that when a position is reached where taxation is beyond common sense or reason, the industry is bound to suffer on that account.

Finally, I believe that this Bill is unnecessary. I believe that the Chancellor would have been wiser had he said, "We will carry the £30 million loss on the estimated revenue for this financial year." I believe that would have given a breathing space for a proper examination of how to meet the loss in this sector of the Budget. Also it would have given an opportunity for consultations and for representations to be made to the Chancellor for meeting any future loss in a more wide-spread fashion. I believe that the Government have acted in haste, that their proposal is unrealistic, and that it will do more harm to the economy of this country than the Government want the nation to believe at the present time.

5.38 p.m.

Mr. Charles Royle (Salford, West)

It is not without significance that within the course of this Third Reading debate only two hon. Gentlemen opposite have been prepared to appear in this Chamber to say something about the Bill. It is also not without significance that both the hon. Baronet the Member for Manchester, Withington (Sir R. Cary) and the hon. Baronet the Member for Portsmouth, South (Sir J. Lucas) should have been critical of the Government and of the Bill in what they said. Yet in view of all that is going on, and since speech after speech has had to be made from this side of the House, the Prime Minister might be advised when he returns to this country to recommend to Her Majesty that some new baronets should be created for the other side of the House who can be present when legislation needs to be debated.

The hon. Baronet the Member for Portsmouth, South rushed into the House, asked a question that nobody seemed to understand, and rushed out again. He seemed to be making the criticism that certain operators of transport in his constituency had been compelled to sell their lorries and to buy small vans in order to get goods to the docks, but none of us understood precisely what he was talking about.

In the few minutes I shall occupy I want to revert to the question mentioned briefly by my hon. Friend the Member for Bradford, East (Mr. McLeavy) which was mentioned at greater length by the hon. Member for Manchester, Withington. It dealt with the aspect of local authority undertakers and especially with the double approach they will have to make to their constituents and to the users of municipal transport.

The right hon. Gentleman will probably agree with me that sometimes an illustration is better than general arguments in a matter of this kind. I am told by the town clerk of the City of Salford that the municipal transport undertaking has faced an additional cost of £56,000 as a result of the six months' working since June, and that sooner or later—probably very soon—it will have to make an approach to the Traffic Commissioners to enable it to impose an additional transport charge. On top of that, from next week it will have to face an additional cost of £54,000 as a direct result of this Measure.

I want to point out to the right hon. Gentleman what exactly is the difficulty facing this authority. The transport organisation in Salford is run by public representatives, men elected to the council by the city electors, and they are obviously loth at any time to increase their transport fares. However, willy-nilly, they have to face the £56,000 loss incurred during the past six months, and now the Government are compelling them—that is what it amounts to—to increase their fares to meet an additional charge of £54,000 in respect of petrol. I want the Government fully to appreciate what it means for public representatives to ask the users of their transport to pay additional charges.

Is it not also a fact that the tax itself will have a tendency to increase the cost of living? There is not only the additional duty; there is also the increase in the cost of fuel. Consumer goods will rise in price to some degree, as a result of which there will be more and more wage claims. As a result, we have a crazy vicious circle. The situation is not helped by the Government's action in this Measure.

We are told that the provision is temporary. Some hon. Friends of mine have expressed their view of its "temporary" character. I have another illustration which raises doubt in my mind. The late Sir Kingsley Wood imposed post-war credit legislation on the country in the middle of the war with the assurance, "You will get it back if you lend it to the country," but he did not tell the country that years later the Government would take steps to return the money, without interest, when people reached 65 years of age. I am concerned that the Measure which the Chancellor has now introduced as a temporary one may be required by him for much longer than he is at present prepared to indicate. In spite of the Amendment dealt with on Report, I must confess that I have very grave doubts about the early removal of the tax.

My attention was drawn yesterday to the case of a one-lorry man. He had been encouraged by the Government to purchase a lorry when road transport was denationalised. It was because the Government gave him the opportunity that he bought a lorry. Having insufficient capital he had to buy it on hire purchase. Within a short period of having obtained the lorry, with about two-thirds of the payments on it still to be met, he finds that his petrol allocation is to be only one-seventh of what he has been using for his business.

I suggest that the Government might have taken one course or the other, that of rationing petrol or that of putting up the price. To do both represents an imposition upon all motor fuel users. We have all observed during the last few days that petrol at 6s. 0½d. per gallon is easy to obtain. Only a few days ago there were queues of cars a quarter of a mile long at filling stations. Because of the increased tax, one can drive straight into a filling station and obtain petrol without delay. Consequently, I suggest that it was unnecessary for both methods to be applied at the same time I am thankful to be the owner of a Morris Minor car. I might have been the owner of a Rolls Royce or a Bentley, and then I should have been in a mess with petrol at its present price. Thousands of people in the country who own small cars must be very pleased that the burden upon them is no greater. The important people are not, however, the private motorists but the municipal undertakings and the owners of haulage vehicles. The repercussions in those industries are important.

The Government have made a very bad mistake. Only two hon. Members opposite have been prepared to speak in the Third Reading debate, and I suggest that their criticism ought to lead them into the Lobby with us. They ought to protest by their votes as they have protested by their voices during the debate.

The hon. Baronet the Member for Withington said in his concluding remarks that he was grateful to the Chancellor for having got the Bill through so quickly. I share the view of my hon. Friends that the fact that the Government have rushed the Bill through the House within seventy-two hours is a clear indication that they are ashamed of what they are doing. As all of this arises from their shocking policy in the Middle East, I am not surprised that they are rushing it through. This is something upon which we shall look back with a great deal of shame, and I shall never have been happier in recording a vote in this House than I shall be in voting against the Bill tonight.

5.50 p.m.

Commander C. E. M. Donaldson (Roxburgh, Selkirk and Peebles)

The hon. Member for Salford, West (Mr. Royle) will be relieved to have at least one speech from this side of the House made by an hon. Member who is not a baronet. I am not sure of the difference between a baronet and a baron of beef. He probably has a better acquaintance with the difference.

I wish to direct my few remarks to an aspect of the imposition of the tax and the situation in general as it affects the more remote parts of the countryside, in particular my three counties of Roxburgh, Selkirk and Peebles. Already it has been intimated to me that a bus service which has been running in that area for a considerable time is not to be reduced by the amount which the Government desire to make in fuel saving but to be eleminated altogether.

The impact of that is something which the countryside will not be able to accept. If it is forced to accept it, there will be great difficulties for the people in the valleys of Yarrow and Ettrick, who purchase their food and such forms of entertainment as they can get by going into the burghs, if the services are not reinstated—and I understand that they are to be ended tomorrow.

These two valleys are served twice a week—and only twice a week—by a bus operated by Scottish Motor Omnibuses Limited. The buses run from Yarrow, through Yarrowfords, through the Ettrick Valley, across Ettrick-Bridge-End and back to Selkirk. I must give notice to my right hon. Friends that if the Scottish Motor Traction organisation, to which I have already submitted a report on this aspect, is not able to reinstitute its service, it will be essential for the Government to consider the matter at a high level.

The countryside of Scotland and other parts of Britain has been affected by many things. Certainly great good has been done in the past by Scottish Motor Traction and Scottish Omnibuses Ltd. in providing services, where needed, in more remote areas. We are facing not a reduction but complete elimination of services, and that matter will have to be reconsidered. I give notice that I shall have to raise this matter later if it cannot be adjusted at a proper level in Scotland. That is all I have to say about the Bill.

5.53 p.m.

Mr. David J. Pryde (Midlothian)

I am sorry that at this late hour I must either appeal to the Government or endeavour to shake them into consciousness about the concern this Measure has raised. While I have never pretended to be a prophet, I am sure that the ill-effects of this Measure will echo down the corridors of time.

I can remember the Lord Privy Seal telling the country that he intended to reduce the cost of living. The first thing he did was to raise the tax on petrol.

I warned the country at the time that here was a vital ingredient in the cost of living which, more than anything else, would affect the lives of people, because the little trader runs a van and the great co-operative stores have their great fleets of vehicles distributing food. Yet the Government have the effrontery to tell us that the increase will not mean a rise in the cost of living. I say that it will, and it will drive the trade unions to demand more wages.

Government policy is inexplicable; we are being put back into the vicious circle. They committed the greatest political blunder in my recollection—and that goes back a long time, I regret to say—and they are now endeavouring to improve the situation by lowering the standards of living by gathering in shillings from the petrol tax and shillings from prescriptions for the sick, the needy and old-age pensioners These shillings will do them no good. They hunt these shillings with a ruthlessness comparable with a tiger hunting for prey in the forests of Bengal.

If their economics could possibly be of any benefit, we might pardon them, but there is nothing in what they have done which will solve the problems facing the country. We are told that this is only a temporary Measure, but who are the Government to look into the future and promise that it will be only temporary? Has it ever been the custom for capitalist Chancellors to implement their promises in that direction? Never. What security have the people to make them believe that there will be a diminution in the tax burden?

The Government policy is inexplicable. Petrol is so essential to the country that not only ought we to preserve our supplies but to augment them. Instead, we find the Government selling our oil assets, as with Trinidad Oil, and shutting down the natural supplies of Scotland which could be of benefit, perhaps not in an hour, a day, a week or a month. However, their action demonstrates that they have no knowledge of the potentialities of the shale oil industry and cannel coal. Germany was compelled by economic circumstances to embark on a policy of low temperature coal distillation and so on in the 1920s and 1930s. The backbone of the German economy was its home-produced oil. We have handed the very thing upon which we depend to a primitive people in the East, or to the dollar hunters of America.

Who will doubt that America is seeking world domination in oil? Who was it who hunted the Trinidad oil reserves and is today hunting oil in the southern half of America? America does not depend on the natural flow of oil and knows that in world history the oil age will be far shorter than the coal age, and so directs its attention to research. Not our Government. They spend vast sums of money on destroying human life. In Scotland, they spend money wantonly on research into the destruction of human life quickly, and they do not care whether it is humane or not. The talk about being humane in killing the people of Egypt cuts no ice with Scottish people. What cuts ice with them is whether the Government's economic policy is successful. All we can see is the Government handing over the destinies of Britain to American millionaires, or the sheiks of the Persian Gulf.

It is perfectly true to say that the natives living by the Persian Gulf are far better off than the people who operate the oil industry of this country. In my constituency, where vast fortunes were made simply because oil can come out of the earth and be transported in ships across the ocean—which is the natural method of operating rich oil-bearing shale and oil-bearing cannel coal—the industry has been left in a state of neglect. Somebody requires to work the oil, unless the Government, by spending hundreds of millions of pounds, are able to consummate their research work into nuclear energy.

It may be the military aspect of the question which is causing the Government to neglect the shale oil works. It may be that they feel that they would be an easy target in wartime. In 1947, when we were discussing the Gas Bill in Committee, I left prematurely to go into the debate in the House to demonstrate that the retorts which are so necessary to both high-temperature and low-temperature carbonisation could be hidden on the western slopes of the Pentlands in such a way that it would be impossible for any aircraft ever to detect them. Any aircraft from Europe would first require to cross that vast Continent and our own defensive systems would then be able to prevent any damage to the valuable retorts.

That was in 1947, but free oil was there to be got in those days. But even then it could be got only by taking money from the British taxpayer. It is the same today; the money has to come from the taxpayer. The Government are now going to take it from everyone, whether or not they can afford it. Our people in the Great Calder area will be forced to go further and further afield.

I should like to know exactly what constitutes a scheduled area. One of the first areas to be scheduled under the Distribution of Industry Act was the shale field, including the Calders area. Nothing was done, due to the neglect of previous Governments. The name "scheduled area" conveys nothing to our people. It means only that their workers have to go further and further afield in order to get their bread and butter. They have to go to England, Canada, New Zealand. Australia, Africa—all over the world.

It is a dismal outlook for our people. There is no hope for them under the present Government; there is no hope under the present Measure. They can use local transport only if they pay the extra shilling, and the transport cannot run unless it pays a levy to the Chancellor of the Exchequer. I can only go back to my people and tell them of the hopelessness of the Government. The greatest tragdy that ever occurred in this country was when the electors went to the ballot offices and gave the Government a majority of 69.

6.4 p.m.

Mr. Douglas Houghton (Sowerby)

My hon. Friend the Member for Salford, West (Mr. Royle) remarked upon the absence of hon. Members opposite in this debate, and upon how much we were missing their contributions to our discussion. It has been known for the party opposite to hold meetings upstairs at about this hour on Thursday afternoons, and for all I know they may be meeting now to stage a warm welcome for the Prime Minister when he returns to the House on Monday. However that may be, there is perhaps another explanation, namely, that hon. Members opposite dislike the Bill as much as we do. When one is a supporter of the Government and dislikes a Government Bill one is rather reluctant to speak against it, and finds it preferable to stay out of the Chamber.

It is quite obvious already that the Bill contains so many seeds of trouble, difficulty, aggravation and inconvenience that it can be justified only upon overwhelming grounds of public interest. The petrol tax, however temporary, will be an awful nuisance. Many people will try to climb on to the petrol wagon and make a lot of money out of it. A great deal has been made out of it already. I heard this afternoon of a garage which had a nice full tank of 4,000 gallons when the Chancellor of the Exchequer announced the petrol tax. Overnight it made over £200 without putting its petrol pump into action.

That instance could be repeated all over the country. I have heard of garages which have so much petrol in store that they will not be able to take up the amount of petrol which is waiting to be delivered to them so that they may meet the rationing conditions next week. That shows that when a tax of this dimension is introduced in these circumstances many people make unjustifiable profits.

I realise that when the tax comes off we shall see the converse of that medal. When the Chancellor or the Minister of Fuel and Power is able to foreshadow the end of rationing that will indicate the end of the tax, and motorists will then be going about trying to keep their tanks empty instead of trying to get them filled. I suppose that the garage proprietors will then squeal and say, "We are carrying all this petrol in our tanks to supply motorists who are not going to buy it, and at the stroke of six o'clock one night down will go the price, and we shall be landed with petrol which we shall have to sell at least Is. cheaper the next day." I am sure that this temporary tax—and I believe that it will have to be temporary—will cause a good deal of heartburning and dislocation.

When there is a kind of general response to the imposition of a new tax and it creates an atmosphere that costs must go up all round, all traders tend to join in, whether or not they have any justification for raising their prices. I fear that all sorts of people are going to tell their customers, "It is the petrol tax, you know. We are having to put on Id. or 2d.; it is all costing more to deliver. All prices are going up." The consumer cannot say, "Prove to me that you have to put up your prices," because he feels swept up in a general upward movement of prices attributable to this tax.

I am not going to make a sweeping statement and say that it is general practice, but I believe that it is a very widespread practice to calculate profit margins upon overhead costs and other expenses of trade or business, and that when the price of petrol goes up, and the increase is put either on distribution or the price of commodities, the profit margin will be calculated on top of that, so that in order to arrive at the final price to the consumer we have to add together both increases.

We also know that many traders like to work to a nice round figure, to the nearest 1d., 6d. or 1s. It is easier. It is the nearest figure up, rather than the nearest figure down.

All these things will contribute to the atmosphere of rising prices. Small wonder, then, that the trade union movement is getting ready to utter a warning; that if the consumers—which on the whole means the people working for their living—are to be exploited by the imposition of this tax, then they are entitled to take steps to defend themselves against injustice and exploitation. If that happens, it may add to the general upward movement of everything, and also it will add to the difficulties of going into reverse when the tax comes off. I am quite sure that if needless increases in price are to be charged on account of the petrol tax, the trade unions are certainly entitled to consider their own position in relation to this new situation.

A great deal more could be said about the tentacles of this tax which will spread throughout the whole economy. As I said a moment ago, it can be justified only by the overwhelming need of public interest. My hon. Friend the Member for Bradford, East (Mr. McLeavy) referred to the loss of revenue. I beg him to dismiss from his mind any idea that it is necessary for the Chancellor to make good the loss of revenue. I do not believe that the right hon. Gentleman need do so. He has demonstrated to the House that he needs to do no such thing.

Mr. McLeavy

My hon. Friend will agree that I suggested that the Chancellor should forgo it?

Mr. Houghton

Yes. I would speak more strongly, and say that he has no right to demand this additional tax solely because the fall in the consumption of petrol would lead to a temporary loss of revenue. His Budget is not in danger; he has said so. His Budget surplus is not in danger; he has also said that. Consequently, we can dismiss that argument and I need not deal with the economic or other needs at this moment.

We have already dealt with guarding the precious oil by taxation as well as rationing. This will not do any such thing, except to a minor extent, and perhaps even then only in directions which represent hardship and deprivation. As I see it, the only justification for this tax is to show the world that Britain is still strong, that we are determined to survive and will have no hanky-panky about devaluation and the rest of it. Whether we acted rightly or wrongly, wisely or unwisely, we recognise that there is a price to pay and we are going to pay it. As I see it, that is the Chancellor's message, and he intends to reinforce it by this tax.

I am all in favour of the message. I believe that we have to show to the world—when the hands of people begin to tremble every time they touch the £—that they need not be too apprehensive, that our trading position is good and that our determination to survive and prosper is as strong as ever. They need not fear that Britain will wilt under the strain. Sometimes brave words will do the trick. After all, during the war the right hon. Member for Woodford (Sir W. Churchill) had to use brave words when he had little with which to fortify them, and there is no reason why we should not ask to be believed in the present crisis.

Does the House think that the world is unduly impressed by our sticking this tax on petrol in order to reinforce our message? I do not think so. I believe it to be quite unnecessary. After all, the rest of the world must understand that we are almost the most highly taxed com- munity in the world. There is only one other country more highly taxed than we are, and that is such a rare thing that for the moment I forget which country it is. But we are heavily taxed, and I do not see that there is any particular virtue in taxing ourselves more in order to show that we are ready to make sacrifices to reinforce our economy as circumstances may require.

So I have no hesitation, once more, in opposing the tax as unjustified in present circumstances, serious as they are, as an unfair tax and as one which will sow the seeds of much discord and trouble at home. I believe the Chancellor has been quite unwise in making the proposal at this time, and the emptiness of the Government benches shows that, on the whole. hon. Members opposite agree with my right hon. and hon. Friends that this is an unnecessary gesture to convince the world of our stability and economic strength. We could have got on quite as well without it. We are asking our people to put up with unnecessary irritation, hardship and inconvenience in order to underwrite the follies of Her Majesty's Government.

6.17 p.m.

Mr. Robson Brown (Esher)

It is always a pleasure to follow the hon. Member for Sowerby (Mr. Houghton). I doubt if he has ever spoken to this House without saying something profound and worthwhile. The hon. Gentleman wondered which nation is more highly taxed than we are. I believe it is Sweden. If it is any consolation to the hon. Gentleman, I can tell him that the suicide rate in Sweden is even higher than our own. I do not know whether there is any connection between the two things, but I suspect that there may be.

The hon. Member for Sowerby put his finger on a crucial point when he asked whether this tax operated in the public interest. I believe that it does. I propose to be frank enough to say, as a Conservative back bencher, that it is an unpopular tax; one which obviously was imposed by the Government with great reluctance and after careful consideration, and for reasons which I well recognise. There is not a constituent of mine who possesses a motor car, a motor cycle or a motor scooter who likes this tax. That applies not only in my constituency but in the constituency of every hon. Member in this House. The reasons for this tax are self-evident and rather obvious.

Again the hon. Member for Sowerby put his finger on the point when he said the world is looking at us and watching every move we make. The imposition of this tax is a clear demonstration of our intention and purpose to do everything we can to maintain the stability of our finances. Secondly, unpopular as it is, this tax is bound to have some practical effect on the consumption of petrol and oil at this time. I do not expect that I shall be very popular with my constituents when I say that I believe the Government have been quite generous with the ration to the ordinary private motorist.

Mr. Ernest Davies

Too generous.

Mr. Robson Brown

The hon. Gentleman will be less popular than I. At any rate, I think that under the circumstances the Minister has been quite generous. The effect of the increase of 1s. a gallon on petrol on the private motorist represents only about two packets of cigarettes a month. That is the popular way of evaluating the effects of a tax. We always use cigarettes as an example, and I believe that the Chancellor has said that the effect of this tax will amount to about 7s.

Mr. Houghton

Though we express these matters in terms of a tobacco currency, people still do not give up cigarettes.

Mr. Robson Brown

I cannot answer for what people give up. I am only mentioning tobacco as a measure of the cost.

Now let me turn to the attitude of industry and the trade unions. I bitterly deprecate what appears to be a tendency on the part of a large number of people to immediate profiteering out of the unfortunate position of the country. 1 cannot measure it it is maybe a petrol station here or an operator there. I say, in a broad, general fashion, to every employes and industrialist in the country, that it is against the national interest, utterly opposed to the national interest and completely unpatriotic, to increase in any shape or form the price of any article on the excuse of the cost of the increase in the duty.

Every section of the community should try to absorb this increase in cost. If ever there were a time in the affairs of our nation when we had to forget party politics and divisions of left and right and of employers and employees, it is now. We must face the fact that since the war we have been three steps away from the abyss and have refused to recognise it. Economic crises have followed one after the other, under both Governments. We have suffered devaluation and inflation. People in general, including employers and employed, have not been prepared to recognise the situation. Surely now, when we are standing on the very brink of it, we might come to our senses.

Employers should set an example to the nation and say that in no circumstances will they increase prices. The amounts involved are quite modest and do not justify increases. We should absorb these increases and make the sacrifice. On the other side, the trade unions might say, "If the employers will put into cold storage their demands, so will we." Perhaps the trade unions, for whom the hon. Member for Bradford, East (Mr. McLeavy) always speaks with great dignity and authority, would put their demands into cold storage during the great emergency which the country is facing.

Mr. McLeavy

The hon. Member has suggested that employers should set an example. Would he agree that it would not be possible for passenger transport and road haulage undertakings to take up the increase without increasing their fares or charges?

Mr. Robson Brown

It is not possible in a general debate to go into the particular aspects of transport companies or undertakings. We all have reason to believe that the increase is not permanent and will not be continued indefinitely. It seems valid to suggest that those undertakings could, in the national interest, absorb these additional costs for three months or even six months, within their own economies.

Mr. McLeavy

I am sure that the hon. Gentleman is trying to make fair contribution to the debate. Does he not appreciate that in road passenger transport most municipal authorities are already in debt? Some of them have been in debt for a number of years and they cannot possibly carry this increased charge of 1s. 6d. the increase in tax, the increased cost of petrol and the increase in the price of fuel oil. In point of fact, they will have to put up their charges in order to meet their responsibilities.

Mr. Robson Brown

The hon. Gentleman is very well informed on questions about municipalities, and I would defer to him. I could not venture at this moment to debate the effect of these comparatively small increases in cost on the over-all economy of any municipal undertaking. I still repeat that those that can should. They should not seek at this moment to add a farthing, a halfpenny, a penny or anything else to the cost borne by the ordinary people, whose burden is too great as it stands. In the last few days we have been pressing for in the House of Commons, and we have now had from the Chancellor of the Exchequer, a categorical assurance that the period of this increase in costs will be related to the ration period. We have had a complete and absolute assurance on that point. I wish we could have as complete an assurance from industry and the various undertakings who may take advantage of this situation to increase their prices, and are already doing it in some cases, that at the end of the emergency they will reduce their charges again. I very much doubt it.

Mr. Royle

Does the hon. Gentleman realise that the petrol companies have already put 5d. on the price of the gallon of petrol, in addition to the present increases? Has he anything to say to them about the action that they have taken? The addition is out of all proportion to the extra cost of bringing the oil round the Cape.

Mr. Robson Brown

The hon. Member for Salford, West (Mr. Royle) has touched on a valid point. Again, it is a question of the economics of the oil companies. I do not believe that any oil company has increased its price deliberately or has any desire to increase its profits in any way, but merely wishes to cover the actual cost of the inconvenience occasioned to it by this situation. I genuinely believe that. We have all our stalking horses and Aunt Sallies in this House; one of them happens to be the oil companies I do not accept by any manner of means all the accusations that have been made against them.

In the last two or three years, I have studied the interesting oil situation in the Middle East. I can find no evidence—I repeat that—of any unreasonable attitude by any of the oil companies of the world against our interests, or any machinations by any oil companies in the Middle East against our interests. In fact, the reverse has been the position. The interests of the American oil companies in the Middle East are equally our own. Our interests are their interests, and theirs are ours. If they interfere in any way with us they interfere with themselves. One of my hopes about the Middle East is based on my belief that the interests of the one are compatible with the interests of the other.

6.28 p.m.

Mr. Bottomley

The only time we hear a call for unity and national solidarity is when we are asked to give support to Conservative policies which we say have always led the country into disaster. If Government supporters had made an appeal for national unity and for making sacrifices when Sir Stafford Cripps was Chancellor of the Exchequer, we should not have had the recurring crises that we have had since. It was not so. We believe in the policies which we advocate, and we believe that if they had been followed, we should not be embarking upon the Third Reading of this Bill.

The debate has been conducted in a spirit of harmony and understanding, although we feel very strongly against the Bill. We think it is a wretched, useless Bill that will add to the cost of living and will not in any way solve our economic difficulties. If it has been a harmonious debate I would pay tribute to the two Ministers. It has been their personality and presence that has contributed to the way in which the debate has been conducted.

As my hon. Friend the Member for Sowerby (Mr. Houghton) said, the Government are trying to find some way in which the world can be given to believe that we shall solve our economic problems, and the way in which they are doing it is by the introduction of this tax. The Bill has been put forward speedily. Earlier this afternoon, I made a protest about the procedure. I should have liked to see the Government act just as speedily when they announced petrol rationing. If at that time they had said they proposed to ration petrol they had put up the price of petrol and taken off that amount spent in the black market, that would have been of some use.

We have to save petrol. There is no doubt about that. We indicated that rationing was the best method, not by the purse but by the coupon. Fair shares is the way in which it should be managed, yet even in that respect more petrol has been given for pleasure motoring than to that section of the people who will help to restore the economy of the country.

Although we do not like the tax and think it unnecessary, we have done our best in Committee to suggest Amendments which would improve it. On Second Reading we suggested that there should be a time limit, and on Third Reading we are entitled to some information from the Financial Secretary. However conciliatory he may have been in saying "A month after the day rationing ends the tax will come off," there is no idea of how long it will be on. Surely the Government must have a rough idea now of when the Canal is expected to be cleared. Surely they have an idea of other sources of petrol. Surely the Americans have told them more than they told the Americans about the Suez fiasco. The Government should he able to say whether the tax will last for one, two, three, four, or perhaps a few more months—I hope not so long. They should give us an idea of how long the liability is to be with us.

Most people think of hydrocarbon oil as petrol alone. They think of service stations and garages, but we have tried throughout the debates during the Second Reading, in Committee, and now on Third Reading, to draw attention to the harm which will be done to industry generally Only about a quarter of these oils are consumed for pleasure or car services as petrol coming from service stations or garages. All the rest is used in industry in one form or another.

The trade figures have improved, but at the moment when industry is showing that it is tackling the job, particularly in the export drive, this additional burden is put upon it. It is no use the Financial Secretary saying, as he tried to say a day or two ago, that the increase does not matter. I told some of my friends about these observations of the Government, and they said that had it been the Goverment who were competing with traders overseas they would find that the margin was so narrow that they would have been pushed out of the market.

If I understand the Treasury view aright, it is that if distinction is made between various oils and the tax is not spread over all—if diesel or some other oils are exempt—the whole of industry, and transport particularly, would tend to turn over to the oil which did not carry the tax. I can understand that because the Treasury says that it would lose money, but this increase is to be only for a short time and the Treasury knows how much will be lost and there should be no repercussion. Surely there was no need to impose this burden on industry and passenger transport services in the belief that it would not disturb the balance of the economy and do more harm.

In our judgment this tax will send up the cost of living, which will be an additional cost to the tax itself. My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) has told me that in spite of what the Government have said—than in regard to its effect on other commodities the Government hope that the removal of the tax will result in a lowering of prices, and that prices will go back to what they were before—a headline in the Evening Standard says that there is no guarantee on London fares. That seems to be the first shock. It does not look as if the cost of living will come down to what it was before the tax was put on.

As has been said by many of my hon. Friends, we know that once an article goes up in price it is very difficult to get that price down again. More often than not it remains at the higher figure. We are not satisfied that the cost of living will show a tendency to come down. On the contrary, we think it will continue to rise, with disastrous results to the economy, and cause another move towards inflation, which surely we all wish to avoid.

I believe that this petrol tax will certainly increase costs and that the damage will be higher than the Financial Secretary has estimated. It is known that it will result in increased fares, as my hog Friends have shown, and as a result of increased charges and costs on production the cost of living generally will be increased. I have been told that the Evening Standard, or one of the London newspapers this evening, says that the Trades Union Congress and the Federation of British Industries are both troubled about the possible rise in the cost of living and difficulties which can arise from this tax.

In Committee, we appealed for relief from the tax for oils produced from shale mined in the United Kingdom. My hon. Friend the Member for Midlothian (Mr. Pryde) and others put forward powerful pleas for that industry in order that we might use indigenous material. I should have thought that that was a valuable suggestion at any time and particularly now. We also asked that dery for road passenger vehicles should not be subjected to the additional tax. We urged that hydrocarbon oils used for carrying goods and passengers should not carry the tax. I particularly urged that hydrocarbon oil used, or forming, part of the material used, in the manufacture and preparation of certain articles ought not to be taxed.

We were very grateful that the Financial Secretary, on behalf of the Government, was able to say that disabled persons using mechanically propelled vehicles would not be called upon to pay the tax. That is a humane decision and one which we all accept gladly. In Committee there was a tendency to argue general principles as though, as we argued earlier this year, we were asking for the abolition of the tax as a whole. We could not have done that, but asked that the new tax of Is. should not be imposed on the goods and services which I have mentioned.

I have mentioned the cost to industry. I gather that the meeting of the Federation of British Industries went on for two hours yesterday without any final conclusion other than that this tax will impose a burden on industry. I hope that by now the Financial Secretary realises this problem, which has to be faced and which cannot be brushed aside as something which does not really matter. In many industries the process of production is vast and complex and there is an interlocking series of operations. That will be possible only if this tax is taken off. It creates a heavier burden for industry and transport than the Financial Secretary suggested in Committee. We hope that the right hon. Gentleman will give us a better answer today as a result of having studied the contributions made by my hon. Friends.

There is much more which could be said upon this matter, but we want to give the right hon. Gentleman adequate time in which to reply. We shall carry our objections to a conclusion because we think that the proceedings have been far from satisfactory. We are of the opinion that the Bill has been badly conceived, and we say that it is further evidence of the inability of the Government to look after the welfare or the economy of the country. I shall have no alternative but to advise my hon. Friends and to go into the Lobby and vote against this disastrous Bill.

6.40 p.m.

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

The right hon. Member for Rochester and Chatham (Mr. Bottomley), who spoke so generously about my hon. and learned Friend the Economic Secretary and myself, has said how much he dislikes the Bill. He has said that the petrol duty is unpopular, thereby showing how closely he agrees with the Chancellor of the Exchequer, who said that at the very beginning of our proceedings.

If the tax is unpopular, I must say that the Bill has not been faced with a tumultuous attack in the House. In the last two-and-a-half hours since my hon. and learned Friend ended his speech, the proceedings have been thinly attended. I say nothing against that, for I am well aware how hard it is within the rules of order to find anything new to say on the Third Reading of a short Bill, especially when we are taking all the stages of it within one week. Few of us can repeat ourselves without that being spotted by hon. Members opposite.

There were, however, one or two intriguing new arguments this afternoon. The hon. Member for Loughborough (Mr. Cronin) made as one of his points against the Bill the fact that to put an additional tax on petrol in mid-December would be a savage deterrent against foreign tourists who want to drive their cars around England. If the foreign tourist is deterred from driving his car across the wolds and moors on a February night, that might be more likely to ensure that he will come to the country at a more salubrious time of the year.

The hon. Member for Loughborough explained how strongly he disagreed with the views of the Economist about the effect of the tax on the cost of living. He said that the views of the Economist were jejune. I thought he went out of his way to underline the sentence in the Economist which had been quoted by my hon. and learned Friend. The Economist of 8th December said: A great deal of nonsense has been talked about the effect of this increase on the cost of living. The hon. Member for Midlothian (Mr. Pryde) returned to the charge about the Scottish shale oil industry. I am not sure whether I heard him aright, although I listened carefully, but I understood that he implied, even if he did not actually say it, that we on the Government side were all villains towards Scotland. We may be villains, but the effect of our villainy is that at this time of year unemployment in Scotland is lower than it was in any year under the Socialist Government.

Mr. Pryde

The Minister must be conversant with the fact that the employment of people in the shale industry area is maintained only because they are tearing down the foundations of the shale industry. Where will they go when the foundations have been torn down?

Mr. Bottomley

I am sure the right hon. Gentleman does not want to be unfair. It is true that unemployment is lower than during the period of the Labour Government, but he will recognise that that is because of the Labour Government's distribution of industry policy, which sent factories there and made it possible.

Mr. Brooke

I thought I was getting a little out of order and I feel sure that if I followed the right hon. Gentleman and discussed the Distribution of Industry Act I should be called to order by the Chair.

The hon. Member for Sowerby (Mr. Houghton) spoke of the unjustified profits which oil distributors made on the evening when the tax went up. He is familiar with these matters, and he knows that there is a profit when indirect taxation rises and a loss when it falls. He fairly said that losses would be suffered when the guillotine which we have today inserted into the Bill ultimately falls or a Treasury Order is made. There will then be a tax loss on the stocks which have borne tax and which are in the hands of distributors.

Had we accepted the Opposition Amendment to make this tax end automatically on 5th April, I can see that it would not have been easy to buy petrol on indeed to sell petrol that afternoon, and I presume that the hon. Member for Sowerby, with all his Income Tax experience, felt that there might be some advantage gained thereby to our Income Tax calculations.

The hon. Member for Stockton-on-Tees (Mr. Chetwynd) and the right hon. Member for Rochester and Chatham sought from me a prophecy about the future course of our oil supplies. I have a feeling that both of them had kept for this afternoon a speech which might have been delivered in Monday evening's debate on the Motor Fuel Rationing Order. Certainly Treasury Ministers have to take much on themselves, but we guard against anticipation of future financial Budgets, and I will certainly be wary not to anticipate the oil budget.

An hon. Member made an allegation—which I thought a little ungrateful after the Amendment which we introduced on Report—that by including our Amendment the House might have induced the Government to retain rationing longer than they would otherwise have done. It was insinuated that there would be some revenue advantage in it which a grasping Government would seize. I must put this to the House: can hon. Members conceive it possible that the Department of Customs and Excise would ever find it advantageous to ration beer?

The hon. Baronet the Member for Withington (Sir R. Cary) and one or two other Members urged the Treasury not to hesitate to make an order terminating the extra duty without waiting for the full month. I can certainly give an assurance that we shall not feel bound to wait until the guillotine falls at the end of the month. I make no forecast whatever of what we shall do, but we shall not feel obliged to act in that way. In fact, we should not hesitate to make an order earlier if that seemed desirable.

The hon. Member for Enfield, East (Mr. Ernest Davies) made some calculations, which I do not think I quite followed, about the net revenue out-turn of this extra tax. I gather that he suggested that we were budgeting for a net improvement of £4 million this year from the oil duty.

Mr. Ernest Davies

I am sorry if I did not make myself clear. When I was using that argument it applied only to road passenger vehicles. I said that the exemption of road passenger transport would involve £4 million and therefore all the inconvenience to road passenger transport was at a cost of £4 million.

Mr. Brooke

I gave the arguments in Committee yesterday why it would have been both impossible and unwise to exempt road passenger transport from this tax, sorry as I am for those who either run bus services or use buses and may thereby be affected by it.

I want to put on record once again that what we are doing is seeking to restore the estimated revenue from the oil duty to what it appeared likely to be before rationing. The oil shortage of this autumn and winter would have involved the Chancellor in a loss of about £30 million of revenue, and we calculate that the imposition of this tax will restore that £30 million.

Again for the record, I should like to say a word or two by way of comment on the speech of the hon. Member for Enfield, East, in which he referred to the Budget. I gained an impression that he was attacking this duty on the ground that the Chancellor was already so comfortably placed that he could well do without the £30 million of revenue which the restriction of the supplies of oil would cost him. Unless I mistook his words, the hon. Member for Enfield, East spoke of a substantial "overall Budget surplus." The truth is that the Budget surplus above the line, estimated last April at £460 million, will not be as large as that, although it will still be very large. But the overall Budget deficit will be smaller than was originally anticipated. That is a highly satisfactory fact. It will be smaller, because the deficit below the line will be considerably diminished as compared with the original estimate.

Mr. Davies

But does not that confirm what I stated? I quoted the Chancellor as having said that, taking the figures above and below the line together, the overall out-turn of the Budget will be better, not worse, than was forecast last April. My argument was that, as the overall out-turn would be better, not worse, the Exchequer could have afforded to meet this £30 million rather than impose this burden on the country.

Mr. Brooke

If I heard the hon. Gentleman's first speech aright, he did not say the "overall Budget out-turn" but the "overall Budget surplus", and in case there was any misunderstanding, I wanted to make sure that the record was correct.

None of the Treasury spokesmen has sought to conceal that this Bill is unpopular. In fact, all taxes are unpopular. Indeed, neither as a back bencher nor as a Treasury Minister have I yet detected one that has been lauded to the skies. Any action, if of a right character, taken in this economic situation was bound, in one sense or another, to be unpopular. The intention was, first, to replace the revenue lost from the oil shortage, and. second, to stimulate and force restraint within the ration so that we were, as my right hon. Friend said, safeguarding oil —"this precious liquid"—nat only by the ration but also by price.

In addition to that, what we were facing ten days ago, when the Chancellor announced the proposals, was a run on sterling. He disclosed the very heavy losses that our gold and dollar reserves had suffered over the past month, and what he put before the House was a balanced and comprehensive policy for dealing with the urgent situation that then challenged us. We needed to be seen by the whole world to be taking steps ourselves to put our house in order, acting aright and not just trusting that other people would lend us money. However generous our friends were prepared to be, it was up to us to show that we were prepared to do something ourselves.

The strength of sterling is a national asset. I know how much my right hon Friend the Chancellor appreciated the words which the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) used, when following him, last Tuesday week. Throughout our debates, however controversial, there has been, I think, no difference of opinion there at all. We are all at one that it is our common interest to sustain the value of the pound. The unpopular provision contained in the Bill is part of that strengthening of sterling, and I hope that even the hon. Member for Sowerby, who cast some doubts on whether it was necessary to do any more to that end, would not die in the last ditch for inaction, but would be as patriotically keen as any of us to see that sterling maintained its value.

Now, are we to turn away from all extra taxation because taxation is unpopular? I do not think that we could possibly run our country on those lines, nor would anybody ever accept the post of Chancellor of the Exchequer if he were told at the outset that he must hold back from ever imposing extra taxation for fear of unpopularity. I should like to quote to the House what an hon. Member said on the last occasion but one when the petrol duty was raised. This is an extract from the speech of the hon. Member for Nelson and Come (Mr. S. Silverman)—whose speeches I would not normally be found quoting with high approval.

If I were about to attack the hon. Member, I should certainly have given him notice. I am sorry that he is not in his place, but I hope that his hon. Friends will tell him how cordially I agree with him. On 14th June, 1950, speaking on the proposal to double the petrol duty, which the Labour Government of that day had announced, he said: I confess at once that this tax is not popular. … Not only this duty is unpopular, but all taxes are unpopular. If a Chancellor of the Exchequer, in meeting the nation's needs year by year, were to wait until he could find a popular tax, we would have to do without a great many of the things we like to have and for which most of us are prepared to pay. The real test of the duty is not whether it is popular, but whether the object intended to be served by it is an object which the House and the nation would like to see achieved."—[OFFICIAL REPORT, 14th June, 1950: Vol. 476, c. 270.] In this case, we are so planning our affairs as not to exploit the nation by seeking to take from its pocket more oil revenue than it originally expected to pay. In the Bill, we are safeguarding against unlimited increases in bus and taxi charges. I should like to reinforce what my hon. Friend the Member for Esher (Mr. Robson Brown) said so bravely and soundly, that there is no case whatever for every Tom, Dick and Harry, whether employer or worker, to come along now and say that this temporary increase in tax entitles him to demand unlimited higher prices or wages. No one could possibly sustain that argument.

The hon. Member for Salford, West (Mr. Royle) told us that one change that he had noticed from the imposition of this new duty was that immediately after it came into operation it was possible again to get petrol from garages. That seemed to me to prove precisely what the Chancellor had said—that it was desirable to safeguard petrol, not only by rationing but also by price. Of course, the price of petrol and oil has gone up substantially, but there is no justification for this talk of inflation and substantial rises in prices as a result of this duty.

As to inflation, again I found it extremely helpful to study those debates on the doubling of the petrol duty in 1950. Sir Stafford Cripps, to whom the right hon. Member for Rochester and Chatham referred in terms of high regard, said, quite significantly, in winding up the debate on the Third Reading of the Bill which imposed that extra petrol duty: … some hon. Members … say to put a duty on petrol is inflationary. Well, it certainly is not inflationary unless it is going to lead to a very great increase in wages and and salaries. The increase in the price of an article which is sold to the public is deflationary, not inflationary, and, therefore the accusation that this is an inflationary duty is, of course, completely wrong from any economic point of view. The complaint that is made, however, is that this increase in the cost of articles will affect adversely the trading capacity of this country. The only way in which that argument has been given any substance is by the most flagrant exaggeration of the effects of this duty upon the finished price of am article".

Mr. Houghton

Now that the right hon. Member has the history book in his hand, will he tell us whether on that occasion Members of his party denied all that Sir Stafford Cripps said and went into the Division Lobby against him?

Mr. Brooke

The difference between then and now is that my hon. Friends and I have learned so much and hon. Gentlemen opposite have even forgotten what they once knew.

In a moment or two we shall divide. I know that the House has other important business to deal with this evening. The right hon. Member for Rochester and Chatham has indicated that his party is going into the Lobby against this proposal. One of the grounds for opposition which we have heard constantly repeated during these debates is the cruel increase in prices which this new duty will impose. One person who will scarcely be able to go into the Lobby on that argument is the right hon. Gentleman the Leader of the Opposition. What did he say in the debate from which I have just been quoting? The right hon.

Division No. 29.]	AYES	[7.2 p.m.
Agnew, Cmdr. P. G.	Dance, J. C. G.	Hill, John (S. Norfolk)
Aitken, W. T.	Davidson, Viscountess	Hinchingbrooke, Viscount
Allan, R. A. (Paddington, S.)	D'Avigdor-Goldsmid, Sir Henry	Holland-Martin, C. J.
Alport, C. J. M.	Deedes, W. F.	Hope, Lord John
Amory, Rt. Hn. Heathcoat (Tiverton)	Digby, Simon Wingfield	Hornby, R. P.
Arbuthnot, John	Donaldson, Cmdr. C. E. McA.	Horobin, Sir Ian
Armstrong, C. W.	Doughty, C. J. A.	Howard, Hon. Greville (St. Ives)
Ashton, H.	Drayson, G. B.	Howard, John (Test)
Astor, Hon. J. J.	du Cann, E. D. L.	Hughes Hallett, Vice-Admiral J.
Atkins, H. E.	Duncan, Capt. J. A. L.	Hulbert, Sir Norman
Baldock, Lt.-Cmdr. J. M.	Duthie, W. S.	Hurd, A. R.
Baldwin, A. E.	Eden, J. B. (Bournemouth, West)	Hutchison, Sir Ian Clark (E'b'gh. W.)
Balniel, Lord	Elliot, Rt. Hon. W. E.	Hutchison, sir James (Scotstoun)
Barber, Anthony	Errington, Sir Eric	Hylton-Foster, Sir H. B. H.
Barlow, Sir John	Erroll, F. J.	Iremonger, T. L.
Barter, John	Fell, A.	Irvine, Bryant Godman (Rye)
Baxter, Sir Beverley	Finlay, Graeme	Jenkins, Robert (Dulwich)
Beamish, Maj. Tufton	Fisher, Nigel	Jennings, J. C. (Burton)
Bell, Philip (Bolton, E.)	Fletcher-Cooke. C.	Johnson, Dr. Donald (Carlisle)
Bell, Ronald (Bucks, S.)	Fort, R.	Johnson, Eric (Blackley)
Bennett, F. M. (Torquay)	Foster, John	Johnson, Howard (Kemptown)
Bennett, Dr. Reginald	Fraser, Hon. Hugh (Stone)	Jones, Rt. Hon. Aubrey (Hall Green)
Bevins, J. R. (Toxteth)	Freeth, D. K.	Joseph, Sir Keith
Biggs-Davison, J. A.	Galbraith, Hon. T. G. D.	Joynson-Hicks, Hon. Sir Lancelot
Birch, Rt. Hon. Nigel	Gammans, Sir David	Kaberry, D.
Bishop, F. P.	Garner-Evans, E. H.	Keegan, D.
Black, C. W.	George, J. C. (Pollok)	Kerby, Capt. H. B.
Body, R. F.	Gibson-Watt, D.	Kerr, H. W.
Boothby, Sir Robert	Glover, D.	Kershaw, J. A.
Bossom, Sir Alfred	Godber, J. B.	Kimball, M.
Bowen, E. R. (Cardigan)	Gomme-Duncan, Col. Sir Alan	Lagden, G. W.
Boyd-Carpenter, Rt. Hon. J. A.	Cough, C. F. H.	Lambert, Hon. G.
Boyle, Sir Edward	Gower, H. R.	Lambton, Viscount
Braine, B. R.	Graham, Sir Fergus	Lancaster, Col. C. G.
Braithwaite, Sir Albert (Harrow, W.)	Grant, W. (Woodside)	Langford-Holt, J. A.
Brooke, Rt. Hon. Henry	Grant-Ferris, Wg Cdr. R.(Nantwich)	Leavey, J. A.
Browne, J. Nixon (Craigton)	Green, A.	Leburn, W. G.
Bryan, P.	Gresham Cooke, R.	Legge-Bourke, Maj. E. A. H.
Bullus, Wing Commander E. E.	Grimond, J.	Legh, Hon. Peter (Petersfield)
Burden, F. F. A.	Grimston, Hon. John (St. Albans)	Lindsay, Hon. James (Devon, N.)
Butcher, Sir Herbert	Grimston, Sir Robert (Westbury)	Lindsay, Martin (Solihull)
Butler, Rt. Hn. R. A.(Saffron Walden)	Grosvenor, Lt.-Col. R. G.	Linstead, Sir H. N.
Campbell, Sir David	Gurden, Harold	Lloyd, Maj. Sir Guy (Renfrew, E.)
Carr, Robert	Hall, John (Wycombe)	Lloyd-George, Maj. Rt. Hon. C.
Cary, Sir Robert	Harris, Frederic (Croydon, N. W.)	Longden, Gilbert
Channon, H.	Harris, Reader (Heston)	Low, Rt. Hon. A. R. W.
Chichester-Clark, R.	Harrison, A. B. C. (Maldon)	Lucas, Sir Jocelyn (Portsmouth, S.)
Clarke, Brig. Terence (Portsmth, W.)	Harvey, Air Cdre. A. V. (Macclesfd)	Lucas, P. B. (Brentford & Chiswick)
Conant, Maj. Sir Roger	Harvey, Ian (Harrow, E.)	Lucas-Tooth, Sir Hugh
Cooper, A. E.	Harvey, John (Walthamstow, E.)	McAdden, S. J.
Cooper-Key, E. M.	Harvie-Watt, Sir George	Macallum, Major Sir Duncan
Cordeaux, Lt.-Col. J. K.	Heath, Rt. Hon. E. R. G.	Macdonald, Sir Peter
Craddock, Beresford (Spelthorne)	Henderson, John (Cathcart)	Mackeson, Brig, Sir Harry
Crouch, R. F.	Hesketh, R. F.	McKibbin, A. J.
Crowder, Petre (Ruislip &—Northwood)	Hicks-Beach, Maj. W. W.	Mackie, J. H. (Galloway)
Cunningham, Knox	Hill, Rt. Hon. Charles (Luton)	McLaughlin, Mrs. P.
Currie, G. B. H.	Hill, Mrs. E. (Wythenshawe)	Maclean, Fitzroy (Lancaster)

Gentleman the Leader of the Opposition, then Minister of State for Economic Affairs, said—and these words are of profound importance: It cannot be denied that the effects of the petrol Duty are spread very wide throughout our whole economy, so that the influence on any one individual is extremely small. Its influence on the final price of commodities is, indeed, negligible."—[OFFICIAL REPORT, 10th July, 1950; Vol. 477, c. 967 and 1057.]

Hon. and right hon. Gentlemen are about to throw over their Leader.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 2,84, Noes 246.

Maclean, Neil (Inverness)	Pitman, I. J.	Studholme, Sir Henry
Macleod, Rt. Hn. Iain (Enfield, W.)	Pitt, Miss E. M.	Sumner, W. D. M. (Orpington)
MacLeod, John (Ross & Cromarty)	Pott, H. P.	Taylor, Sir Charles (Eastbourne)
Macmillan, Maurice (Halifax)	Powell, J. Enoch	Taylor, William (Bradford, N.)
Macpherson, Niall (Dumfries)	Price, David (Eastleigh)	Teeling, W.
Maddan, Martin	Prior-Palmer, Brig, O. L.	Temple, J. M.
Maltland, Cdr. J. F. W. (Horncastle)	Profumo, J. D.	Thomas, Leslie (Canterbury)
Maitland, Hon. Patrick (Lanark)	Ramsden, J. E.	Thomas, P. J. M. (Conway)
Manningham-Buller, Rt. Hn. Sir R.	Rawlinson, Peter	Thompson, Kenneth (Walton)
Markham, Major Sir Frank	Redmeyne, M.	Thompson, Lt.-Cdr. R. (Croydon, S.)
Marlowe, A, A. H.	Rees-Davies, W. R.	Thorneycroft, Rt. Hon. P.
Marples, A. E.	Remnant, Hon. P.	Thornton-Kemsley, C. N.
Marshall, Douglas	Renton, D, L. M.	Tiley, A. (Bradford, W.)
Mathew, R.	Ridsdale, J. E.	Tilney, John (Wavertree)
Maude, Angus	Rippon, A. G. F.	Turner, H. F. L.
Maudling, Rt. Hon. R.	Robson-Brown, W.	Turton, Rt. Hon. R. H.
Maydon, Lt.-Comdr. S. L. C.	Rodgers, John (Sevenoaks)	Vane, W. M. F.
Medlicott, Sir Frank	Roper, Sir Harold	Vaughan-Morgan, J. K.
Milligan, Rt. Hon. W. R.	Ropner, Col. Sir Leonard	Vickers, Miss J. H.
Molson, Rt. Hon. Hugh	Russell, R. S.	Vosper, D. F.
Mott-Radclyffe, G. E.	Sandys, Rt. Hon. D.	Wakefield, Edward (Derbyshire, W.)
Nairn, D. L. S.	Schofield, Lt.-Col. W.	Wakefield, Sir Wavell (St. M'lebone)
Neave, Airey	Scott-Miller, Cmdr. R.	Walker-Smith, D. C.
Nicholls, Harmar	Sharples, R. C.	Wall, Major Patrick
Nicholson, Godfrey (Farnham)	Shepherd, William	Ward, Hon. George (Worcester)
Nicolson, N. (B'n'm'th, E. & Chr'oh)	Simon, J. E. S. (Middlesbrough, W.)	Ward, Dame Irene (Tynemouth)
Noble, Comdr. A. H. P.	Smithers, Peter (Winchester)	Watkinson, Rt. Hon. Harold
Nugent, C. R. H.	Smyth, Brig. Sir John (Norwood)	Webbe, Sir H.
Oakshott, H. D.	Soames, Capt. C.	Whitelaw, W. S. I.(Penrith & Border)
O'Neill, Hn. Phelim (Co. Antrim, N.)	Spearman, sir Alexander	Williams, Paul (Sunderland, S.)
Ormsby-Gore, Hon. W. D.	Speir, R. M.	Williams, R. Dudley (Exeter)
Orr, Capt. L. P. S.	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)	Wills, G. (Bridgwater)
Orr-Ewing, Charles Ian (Hendon, N.)	Stanley, Capt. Hon. Richard	Wilson, Geoffrey (Truro)
Orr-Ewing, Sir Ian (Weston-S-Mare)	Stevens, Geoffrey	Wood, Hon. R.
Page, R. G.	Steward, Harold (Stockport, S.)	Woollam, John Victor
Panned, N. A. (Kirkdale)	Steward, Sir William (Woolwich, W.)
Partridge, E.	Stewart, Henderson (Fife, E.)	TELLERS FOR THE AYES:
Peyton, J. W. W.	Stoddart-Scott, Col. M.	Col. J. H. Harrison and
Pickthorn, K. W. M.	Storey, S.	Mr. Hughes-Young.
NOES
Ainsley, J. W.	Corbet, Mrs. Freda	Harrison, J. (Nottingham, N.)
Albu, A. H.	Cove, W. G.	Hastings, S.
Allaun, Frank (Salford, E.)	Craddock, George (Bradford, S.)	Hay man, F. H.
Allen, Arthur (Bosworth)	Cronin, J. D.	Healey, Denis
Allen, Scholefield (Crewe)	Cullen, Mrs. A.	Henderson, Rt. Hn. A. (Rwly Regis)
Anderson, Frank	Dalton, Rt. Hon. H.	Herbison, Miss M.
Awbery, S. S.	Darling, George (Hillsborough)	Hewitson, Capt. M.
Bacon, Miss Alice	Davies, Ernest (Enfield, E.)	Hobson, C. R.
Balrd, J.	Davies, Harold (Leek)	Holman, P.
Balfour, A.	Deer, G.	Houghton, Douglas
Bellenger, Rt. Hon. F. J.	de Freitas, Geoffrey	Howell, Charles (Perry Barr)
Bence, C. R. (Dunbartonshire, E.)	Delargy, H. J.	Howell, Denis (All Saints)
Benn, Hn. Wedgwood (Bristol, S. E.)	Dodds, N. N.	Hughes, Cledwyn (Anglesey)
Benson, G.	Donnelly, D. L.	Hughes, Emrys (S. Ayrshire)
Beswick, F.	Dugdale, Rt. Hn. John (W. Brmwch)	Hughes, Hector (Aberdeen, N.)
Blackburn, F.	Dye, S.	Hunter, A. E.
Blenkinsop, A.	Edelman, M.	Hynd, H. (Accrington)
Blyton, W. R.	Edwards, Rt. Hon. Ness (Caerphilly)	Hynd, J. B. (Attercliffe)
Boardman, H.	Edwards, Robert (Bilston)	Irvine, A. J. (Edge Hill)
Bottomley, Rt. Hon. A. G.	Edwards, W. J. (Stepney)	Irving, S. (Dartford)
Bowden, H. W. (Leicester, S.W.)	Evans, Albert (Islington, S.W.)	Isaacs, Rt. Hon. G. A.
Bowles, F. G.	Evans, Edward (Lowestoft)	Jay, Rt. Hon. D. P. T.
Boyd, T. C.	Fernyhough, E.	Jeger, Mrs. Lena (Holbn & St. Pncs, S.)
Braddock, Mrs. Elizabeth	Fienburgh, W.	Jenkins, Roy (Stechford)
Brockway, A. F.	Finch, H. J.	Johnson, James (Rugby)
Broughton, Dr. A. D. D.	Fletcher, Eric	Jones, Elwin (W. Ham, s.)
Brown, Rt. Hon. George (Belper)	Forman, J. C.	Jones, Jack (Rotherham)
Brown, Thomas (Ince)	Fraser, Thomas (Hamilton)	Jones, J. Idwal (Wrexham)
Burke, W. A.	Gaitskell, Rt. Hon. H. T. N.	Jones, T. W. (Merioneth)
Burton, Miss F. E.	Gibson, C. W.	Kenyon, C.
Butler, Herbert (Hackney, C.)	Gooch, E. G.	Key, Rt. Hon. C. W.
Butler, Mrs. Joyce (Wood Green)	Gordon-Walker, Rt. Hon. P. C.	King, Dr. H. M.
Callaghan, L. J.	Greenwood, Anthony	Lawson, G. M.
Carmichael, J.	Grenfell, Rt. Hon. D. R.	Ledger, R. J.
Castle, Mrs. B. A.	Grey, C. F.	Lee, Frederick (Newton)
Champion, A. J.	Griffiths, David (Rother Valley)	Lever, Harold (Cheetham)
Chapman, W. D.	Griffiths, Rt. Hon. James (Llanelly)	Lever, Leslie (Ardwick)
Chetwynd, G. R.	Griffiths, William (Exchange)	Lewis, Arthur
Clunie, J.	Hale, Leslie	Lindgren, G. S.
Coldrick, W.	Hall, Rt. Hn. Clenvil (Colne Valley)	Lipton, Lt.-Col. M.
Collick, P. H. (Birkenhead)	Hamilton, W. W.	Logan, D, G.
Collins, V. J. (Shoreditch & Finsbury)	Hannan, W.	Mabon, Dr. J. Dickson

MacColl, J. E.	Paton, John	Summerskill, Rt. Hon. E.
McGhee, H. G.	Pearson, A.	Swingler, S. T.
McInnes, J.	Peart, T. F.	Sylvester, G. O.
McKay, John (Wallsend)	Pentland, N.	Taylor, Bernard (Mansfield)
McLeavy, Frank	Plummer, Sir Leslie	Taylor, John (West Lothian)
MacMillan, M. K. (Western Isles)	Popplewell, E.	Thomas, George (Cardiff)
MacPherson, Malcolm (Stirling)	Price, J. T. (Westhoughton)	Thomas, Iorwerth (Rhondda, W.)
Mahon, Simon	Price, Philips (Gloucestershire, W.)	Thomson, George (Dundee, E.)
Malnwaring, w. H.	Probert, A. R.	Thornton, E.
Mallalieu, J. P. W. (Huddersfd, E.)	Proctor, W. T.	Timmons, J.
Mann, Mrs. Jean	Pryde, D. J.	Tomney, F.
Marquand, Rt. Hon. H. A.	Pursey, Cmdr. H.	Turner-Samuels, M.
Mason, Roy	Randall, H. E.	Usborne, H. C.
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.	Rhodes, H.	Wells, Percy (Faversham)
Monslow, W.	Roberts, Albert (Normanton)	Wells, William (Walsall, N.)
Moody, A. S.	Roberts, Goronwy (Caernarvon)	West, D. G.
Morris, Percy (Swansea, W.)	Robinson, Kenneth (St. Panoras, N.)	Wheeldon, W. E.
Mort, D. L.	Rogers, George (Kensington, N.)	White, Henry (Derbyshire, N.E.)
Moss, R.	Ross, William	Wigg, George
Moyle, A.	Royle, C.	Wilcock, Croup Capt. C. A. B.
Mulley, F. W.	Shurmer, P. L. E.	Wilkins, W. A.
Neal, Harold (Bolsover)	Silverman, Julius (Aston)	Williams, David (Neath)
Noel-Baker, Rt. Hon. P. (Derby, S.)	Silverman, Sydney (Nelson)	Williams, Rev. Llywelyn (Ab'tillery)
O'Brien, Sir Thomas	Simmons, C. J. (Brierley Hill)	Williams, Ronald (Wigan)
Oliver, G. H.	Skeffington, A. M.	Williams, W. R. (Openshaw)
Oram, A. E.	Slater, Mrs. H. (Stoke, N.)	Williams, W. T. (Barons Court)
Orbach, M.	Slater, J. (Sedgefield)	Willis, Eustace (Edinburgh, E.)
Osborne, C.	Smith, Ellis (Stoke, S.)	Wilson, Rt. Hon. Harold (Huyton)
Owen, W. J.	Sorensen, R. W.	Winterbottom, Richard
Padley, W. E.	Soskice, Rt. Hon. Sir Frank	Woodburn, Rt. Hon. A.
Paget, R. T.	Sparks, J. A.	Woof, R. E.
Paling, Rt. Hon. W. (Dearne Valley)	Steele, T.	Yates, V. (Ladywood)
Palmer, A. M. F.	Stewart, Michael (Fulham)	Younger, Rt. Hon. K.
Pannell, Charles (Leeds, W.)	Stones, W. (Consett)	Zilliacus, K.
Pargiter, G. A.	Strachey, Rt. Hon. J.
Parker, J.	Strauss, Rt. Hon. George (Vauxhall)	TELLERS FOR THE NOES:
Parkin, B. T.	Stross, Dr. Barnett (Stoke-on-Trent, C.)	Mr. Holmes and Mr. Short.

Bill accordingly read the Third time and passed.