HC Deb 11 July 1956 vol 556 cc417-38

Section three of the Vehicles (Excise) Act, 1949, shall be amended by the insertion at the end of subsection (1) of the following words:— Provided that in the case of a hackney carriage which is a public service vehicle the duty chargeable under this section shall not be more than twelve pounds ten shillings".—[Mr. Ernest Davies.]

Brought up, and read the First time.

4.15 p.m.

Mr. Ernest Davies (Enfield, East)

I beg to move, That the Clause be read a Second time.

The object of the new Clause is to reduce the annual Excise Duty paid on registrations by the larger of the public service vehicles. Under the Vehicles (Excise) Act, 1949, public service vehicles engaged in road passenger transport are taxed according to their seating capacity. Whereas up to a seating capacity of eight the duty is £12, when we get above that capacity the duty is more than that paid on an ordinary motor vehicle. In fact, it rises very steeply. For vehicles of from eight to 26-seat capacity, it is £12 plus £2 for every additional seat over eight. Over a capacity of 26 it is £48 and over 32 it is £57 12s. This means that a 56-seater double-decker bus, which is the normal bus used in urban areas, bears an annual duty of £86 8s.

The Clause is put forward with a view to trying to help in a very small degree the road passenger transport industry, which, as hon. Members are well aware from previous debates, is in a difficult position in that costs have risen substantially over recent years, fares have had to be increased until in many cases they have reached a point of diminishing returns and the industry is faced with the difficulty of either raising fares further and running the risk of traffic being diverted to other means or cutting down its services, reducing frequencies, or in other ways causing a deterioration of the public services.

In Committee, I moved a new Clause, seconded by my hon. Friend the Member for Bradford, East (Mr. McLeavy), in which we proposed that there should be a discriminatory tax, favouring public service vehicles using diesel oil. This was rejected by the Financial Secretary on grounds which have been produced so frequently by the Treasury that they are becoming rather dog-eared. The main ground for rejection was that it would be a discrimination between different users of transport vehicles, that it would cost the Treasury too much—in that case £30 million—and that, in effect, it would not help rural transport very much because petrol vehicles were still used to a certain extent in rural areas and the concession would relate only to diesel oil.

In framing this new Clause with a view to reducing the registration Excise duty, our objective has been to meet the objections which the Financial Secretary produced. In the first case, it would cost the Treasury far less to reduce the duty on public service vehicles to a flat rate of £12 10s.—that is, for those with a seating capacity of more than eight. The sum of £12 10s. is that paid on most motor cars today.

It is difficult for me to estimate what the cost will be. No doubt the Economic Secretary will be able to give the House the figure. It would certainly not be more than £4 million to £5 million per annum; if we take a reasonable average of about £50 per annum for each of the 75,000 vehicles which are licensed, the concession would come to about £5 million. The cost to the Treasury is, therefore, not exorbitant—a maximum of £5 million which, if it brought relief to the road passenger transport industry and prevented a further increase in fares or enabled existing services to be maintained, would be £5 million well spent.

In the past, the Economic Secretary has used the argument of discrimination, but I believe that in this case we are discriminating against the public service vehicles. It seems to me quite unfair that a bus or a coach carrying from 26 to 56 passengers and occupying per passenger so much less road space than the private car, carrying a driver and possibly one, two or more passengers, should pay proportionately so much greater tax.

It is the private motorist today who is in a favourable tax position. He is in a privileged position. It is the private motorist, particularly in the urban areas, who is contributing very largely to the congestion which confronts us and which creates such difficulties in maintaining the traffic flow. If the private motorist is moving along the road he is adding to the number of vehicles causing congestion. If his car is parked at the side of the road it stops a free flow of traffic by occupying road space.

The big problem facing us today is that of finding parking space for the private motor car whereas, of course, the public service vehicle is provided with its own garage when not in operation. As I have stated, it carries many more passengers than the private motor car in relation to the amount of road space in which it operates. I suggest, therefore, that if there is any discrimination, it is against the road transport operator and in favour of the private motorist.

The House has admitted that if we are to maintain our public road transport service something must be done. Unless relief in some form or another is given, there will be a reduction in the quality of the service and in its frequency, with the result that the public will not be served as well as it has been in the past.

Of course, this is only a small suggestion and only a palliative. The longterm solution for this difficulty has, of course, been overthrown by the present Government. Had the Government pursued the road passenger transport policy proposed by the Labour Government, and which was incorporated in previous legislation, the industry would not be faced with the difficulty which confronts it today.

As it is, some 50 per cent. of the services operating in the rural areas today are running at a loss. They cannot go on operating at this loss which, in many cases, amounts to 1s. per car mile. Having rejected the previous suggestion made by this side of the House on the grounds that it was too costly, I ask the Economic Secretary to accept the suggestion contained in this Clause which would cost so much less.

Mr. Frank McLeavy (Bradford, East)

I beg to second the Motion.

First, I think that we ought to look at the history of this tax on passenger transport vehicles and of the relief from it given to other types of vehicles. I wish to emphasise the point made by my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) that under the Vehicles (Excise) Act, 1949, and, indeed, under the Finance Act, 1952, weighty relief was conferred on the owners of certain types of vehicles. The passenger transport industry still has to pay a very high proportion of duty compared with private vehicles.

My hon. Friend pointed out that under the 1945 and 1952 Acts, the tax on private motor cars was made at a flat rate of £12 10s. per annum as against £85 8s. per annum paid on a double-decker bus. When the Treasury decided to introduce the flat rate of tax for motor cars it was justified on the broad ground that the existing graduated tax was bedevilling the motor industry in relation to design. It is perfectly clear that in introducing the flat rate the Government were throwing overboard the whole question of a charge per passenger seat. That brought about the absurd position that though the seating capacity of private cars, from the Rolls-Royce downwards, varied very considerably indeed, the Government, nevertheless, thought it reasonable and in the interests of the motor car industry to apply the flat rate of tax.

Nothing was done for the passenger transport industry. I do not think that anyone would deny that when such a radical change was made in the rate of taxation for motor cars it added force to the argument that the passenger transport industry should receive similar treatment.

My hon. Friend referred to the new Clause which we put down on an earlier stage of the Bill to provide exemption for the passenger transport industry from the fuel oil duty. At that time, the Economic Secretary made all kinds of excuses why the Treasury and the Chancellor of the Exchequer could not accept the Clause. I say very definitely to the Economic Secretary and to his right hon. Friend that the road transport industry is now in such a difficult financial position that, unless the Government do something to relieve it of some of the burden of taxation, fares will eventually have to go up again, with consequential effects upon the cost of living.

I do not think that there is any other industry so taxed, in one way or another, as the road passenger transport industry. For the life of me, I cannot understand the mentality of the people who are advising the Chancellor in regard to this tax. They seem to assume that if a bus has a seating capacity for 50 or 54 persons it is actually carrying a full complement of passengers throughout the whole of its operating time which is, perhaps, from 5.30 in the morning to 12 o'clock at night. In reality, the position is quite different.

Road passenger transport is in an entirely different position from that of any other section of the transport industry. It is in a different position from that of goods transport. Whereas goods transport carries a load from one point to another, passenger transport has to maintain a reasonable measure of service during both peak and off-peak periods. It has to provide—and the Traffic Commissioners are very keen on this—a reasonable amount of unremunerative services in the country areas and elsewhere, and it has to try to maintain a reasonable standard of fares.

4.30 p.m.

It is of vital importance that the Treasury should realise the difficult position of the passenger transport industry. If vehicles were carrying a full complement of passengers from the very commencement of their duty first thing in the morning until last thing at night there might be some justification for this iniquitous tax upon seating capacity, but the fact that in many cases buses run at a loss during off-peak periods, and that transport undertakings are able more or less to balance their budgets only because of the traffic at peak periods, seems to me to merit fresh consideration of this matter.

During our consideration of the Budget, in discussing the subject of fuel oil taxation I pointed out to the Financial Secretary that at the end of this financial year about 50 per cent. of the municipal transport undertakings would be in debt. I should like to ask one question of the Economic Secretary. If the same position prevailed in any other industry, would the Government be so complacent about it? If it were privately owned, would they be indifferent to the fact that this industry, which has made such a tremendous contribution to the transport of the people to and from the factories, workshops and dockyards, is having to raise its prices because of heavy taxation?

Something must be done for passenger transport undertakings. It is no good the Economic Secretary giving us a stock reply; what we and the industry want to know is whether or not the Treasury will face its responsibilities in connection with the financial difficulties of the industry. During the war, when wage rates and conditions of employment in the transport industry were nothing like so good as those which obtained in munition factories and dockyards, I remember that we had the utmost difficulty in getting staff to man the buses necessary to keep the war machine going. We were not allowed to increase our fares in order to provide more attractive salaries and conditions of employment.

Wage rates and conditions of employment in the industry today are still not as good as those prevailing in other industries. Many hon. Members will be aware that the industry is finding it difficult to man a sufficient number of buses in large cities and towns. The Transport Commission, or any corporation undertaking, in Bradford, Leeds, Sheffield, or elsewhere, will tell the same old story. They will say, "We cannot get the staff to man all the buses required to provide sufficient transport throughout the country." The reason for this is, very largely, that they are not in a financial position to pay rates of wages and provide conditions of employment such as would attract an increased intake of personnel.

We do not want to be fobbed off in this matter. We want a statement from the Treasury about its attitude to this very difficult problem. We have had plenty of sympathy in the past. Just before the last Election the Lord Privy Seal was full of sympathy and understanding for the difficulties facing the transport industry, but he did not do anything. I am asking the Treasury Bench not for a lot of sympathetic words or expressions of appreciation of the work which the industry is doing in the life of the community; what I want is a statement which will assure the industry that the Government will give it some financial help in order to enable it to meet its many difficulties.

There is an overwhelming case for the acceptance of the Clause. It is unreasonable that the working man's Rolls-Royce should be taxed to the full while the real Rolls-Royces, used by the few privileged individuals who can afford to run them, bear a tax of only £12 10s. a year. The whole thing is outrageous. I hope that the Treasury will say that it will give financial assistance to the industry and will accept the Clause because it feels that the industry is entitled to some financial consideration.

Mr. David Jones (The Hartlepools)

I want to put forward one or two other reasons why the Economic Secretary should accept the Clause. I want, first, to take the position which exists in his native City of Birmingham. He knows he well as I do that every morning about 20 double-decker buses leave Birmingham for the outskirts, carrying workmen to various factories. He also knows that after making two journeys in the morning those vehicles go into the depot until they are required, in the evening, to run empty to the factories in order to make one or two trips back to the centre of the town carrying the workers from those factories, and that those vehicles are in use for about three hours a day only, for five days a week.

That test can be applied to very many other towns. For many years I was the chairman of a transport authority in South Wales which had to turn out 17 double-decker buses every morning to convey workmen from various villages to the Treforest Trading Estate. They were not required again until five o'clock in the evening, when they took those workmen back home. They were used only for 16 hours per five-day week. Yet before one of those vehicles could be put on the road it had to pay at least £86 8s. in taxation. In those circumstances there is no inducement to provide vehicles, and any municipality will, if it can, refuse to undertake these workmen's services.

Furthermore, because of taxation being applied upon a basis of the seating capacity and not the size of the vehicle, there is an inducement to reduce the number of seats, with the result that at peak periods many passengers have to stand for whom seats would have been provided if this system of taxation had not been devised.

There is not a Member of this House representing a rural area who has not, at some time or another, addressed communications to the Minister of Transport about this withdrawal of rural services. I had the privilege the other day of attending a conference at Newcastle, convened by the North Eastern Development Association and a Northumbrian rural council, which was seriously concerned about the lack of any facilities at all for bringing the people from the rural countryside into the towns.

The reason given by both authorities, by the companies which the British Transport Commission control and by the privately owned companies, many of whom are under the control of the British Electric Traction Company, for the withdrawal of these services was that they were unremunerative and that no company, whether publicly or privately owned, could be expected to run a majority of its services which were unremunerative.

There is a movement in the transport world to reintroduce the one-man bus because it is believed that by the removal of the conductor it will be possible to reduce costs, but even if a bus company put a 20-seaer bus on the road it would have to pay in taxation about £36 before it could be used. Because of the scarcity of traffic in the rural areas, a vehicle may be standing in a garage for long periods during the day. It may be used for service only in the morning, in the middle of the day and in the early evening. Before that vehicle can be put on the road at all £36 has to be paid. If a vehicle with 26 seats is used, which is a popular type of vehicle for rural services, that figure is increased. I have calculated that it requires an operator of a 26-seater vehicle which is used for 313 days in the year to collect an average of 3s. per day in fares in order to pay the taxation alone.

This is a matter which should be sympathetically examined by the Treasury. The Chancellor recently talked about the plateau of stability. Requests have been made and assented to that there should be no increase in prices during the next 12 months. Exhortations are being made to the trade unions not to make any demands for increases in wages. Here is a glorious opportunity for the Treasury to say that it will make this contribution so that some of the costs which fall upon transport operators may be eased.

I understand from my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) that the cost to the Treasury of this concession would not be very high. At least, the Economic Secretary will not be able to tell us on this occasion that it is unfair to discriminate between heavy oil-consuming buses and petrol buses. Indeed, the right hon. Gentleman who is now the Minister of Pensions and National Insurance once argued against making any concession of tax on diesel oil on the ground that petrol vehicles were used in the rural services and heavy oil vehicles in the urban services.

A simple inquiry from the Municipal Transport Association would have revealed to the right hon. Gentleman that that was pure nonsense. There is only a very small percentage of public service vehicles today which are not heavy oil-consuming vehicles. Therefore, he cannot get away with a statement that a discrimination can be made between the two forms of fuel.

4.45 p.m.

Unlike my hon. Friend the Member for Bradford, East (Mr. McLeavy), I do not think that if this concession were made it would make all the difference in the world to the bus operators, many of whom would still have extreme difficulty in operating their rural services.

The Economic Secretary knows better than anyone else that a high degree of efficiency in the agricultural industry is largely dependent upon the good will of the agricultural workers. What is he to say to the agricultural worker who leaves that industry to go to the nearest big town to live and work if all the services which are so necessary for a decent existence in the countryside are being withdrawn?

Here is an opportunity for the Government to make a gesture which will not cost them very much. I can understand the Treasury refusing to make concessions of any kind which will mean a big loss to the revenue, but here is an opportunity for the Government to say to the bus operators that at least they are trying to help them to use the vehicles which they have to their maximum capacity, because they no longer propose to tax them on the basis of the number of seats provided.

I hope that we shall hear from the Economic Secretary that he will make this little gesture, which will mean so much to the rural areas.

Mr. Sidney Dye (Norfolk, South-West)

I support the new Clause which has been so ably moved by my hon. Friend the Member for Enfield, East (Mr. Ernest Davies), because I represent a rural constituency in which, quite recently, a number of rural bus services ceased to operate because the operators found those services unremunerative. It is, of course, a hardship to the people in the small villages, who cannot afford to own their own motor cars, if there are no public services to enable them to go into the towns to do their shopping. This affects the older people in particular.

I received a letter today from an old-age pensioner in my constituency who lives at South Ickenham. He complained that old-age pensioners now had to pay increased rates on their property because of the higher charges made by the rural district council and yet they were getting fewer services. One of the services which they were no longer getting was the bus service which ran along the rural road not far from their doors. In Norfolk many private operators who have operated bus services for many years, have, owing to the increasing cost of running them—not, I think, because of a decrease in the number of people using them—been compelled to withdraw the services. That comes after the Conservative Party has been in Government for about five years. It comes from a party which has claimed in the past to look after the rural areas in particular.

I was very interested in a debate in this House, about six weeks ago, on a Motion by the hon. Gentleman the Member for Westmorland (Mr. Vane), in which he drew attention to the need for assisting the rural transport services. That Motion was accepted by the House, but we do not want to pass Motions which are meaningless and which lead us nowhere. If the Government are sincere in their desire to assist rural transport, and road transport in particular, here is a way in which they can do it. They will be assisting not only the people who operate the transport and the passengers, but the local authorities.

Norfolk pays more than £100,000 a year for the transport of school children by buses. If, therefore, some deduction were made on the licences for these vehicles it would mean a reduction in the charge for the school buses, and that would help the local rates. It would help the local rates by only 25 per cent. but would help the Exchequer by probably 75 per cent. It is clear that we should not be giving all this concession away. Some would come back in the form of reduced transport charges for all the children from the village schools to the grammar and secondary modern schools throughout the country.

With that in mind, I hope that the Government spokesman will reply in favour of this proposal and will say that, representing the party which says that it looks after these rural areas, the Government recognise this as a means of giving that help. It might not be the best means but it is a means which is at our disposal at the moment, and such a concession would have an immediate effect in the rural areas. Although they all seem to be absent, there are many hon. Members of the party opposite who would welcome this. Why they are absent I really do not know. There is rather a poor showing by the back benchers of the Conservative Party, so many of whom represent, or misrepresent, or represent by absence, the rural districts of England.

This is something which vitally affects the life of the rural communities. Our suggestion is a means by which we can stimulate new transport and keep existing transport on the roads. The life and heart of a rural community is sustained by the people being able to get out of the villages and away from the farms into the towns for enjoyment, for the pleasure of shopping and for other purposes. Transport is essential to the rural community. I hope that the Government will look favourably upon this new Clause.

Sir E. Boyle

The hon. Member for Norfolk, South-West (Mr. Dye) has just complained that there are not present on this side of the House more hon. Members representing the rural areas. I cannot resist pointing out that at any rate one rural Member, my hon. Friend the Member for Rye (Mr. Godman Irvine), who has the doubtful honour of representing myself, has been present throughout the debate.

We have listened to some very interesting speeches on this new Clause, which was so ably moved by the hon. Member for Enfield, East (Mr. Ernest Davies). I will resist the temptation of engaging with him in a general debate on transport matters, partly because I do not think that you, Mr. Deputy-Speaker, would like that on this Clause, and partly because I must confess that transport is one subject on which I have never ventured to intervene in the House.

As the hon. Member explained, the purpose of the new Clause is to reduce the rate of duty payable on public service vehicles so that it shall not exceed that payable on private cars, that is to say, £12 10s. a year. The first observation that I would make to the House is about the cost of accepting this proposal. The annual yield from hackney carriages seating more than eight persons is about £5½ million. This new Clause would reduce the yield to under £1 million, and I will simply say that in connection with a Budget in which my right hon. Friend has had to say "No" to many claimants, I am sure the House will realise that the proposal has to be scrutinised even more rigorously than usual. Certainly, to accept such a new Clause would go against the general principles of the Budget.

I should not, however, like to rest my argument principally on those grounds, but would remind the House that the whole basis of the vehicle taxation system is that, in the main, vehicles operated for profit or for business purposes pay more than private vehicles. In particular, the higher rates for the much heavier and larger public service and goods vehicles reflect, in part, their greater use of the roads and the greater wear they cause to the roads.

I would, in particular, put this point to hon. Members opposite who have spoken. Any concession for public service vehicles would almost inevitably stimulate a campaign for a similar concession for goods vehicles. [HON. MEMBERS: "Oh."] I have no doubt about that, and I do not think that hon. Members opposite will dispute it. If one looks at the figures, in general the licence duties on goods vehicles are appreciably heavier than those on public service vehicles of equal weight.

Mr. McLeavy

I think that the hon. Gentleman has made an important point which brings us back to the argument that I put forward, which was that the people who are advising the Treasury on this matter have not got the facts right. Goods vehicles cannot be compared with passenger vehicles. They carry a given load from one point to another. Passenger transport vehicles have to provide the service. They very often travel with less than half a load, sometimes a quarter of a load, but they have to maintain the service. They have an obligation to the community. There is really no comparison between the two, and I am really surprised that the Economic Secretary should try to get away with that "phoney" argument.

Sir E. Boyle

I know the hon. Gentleman's great knowledge of, and sincerity in these matters, on which he often addresses the House, but I take absolutely full responsibility for the statement that I have just made.

Certainly, if one looks at the figures it cannot be denied that, even agreeing with some part of the hon. Gentleman's point, under the present system they show a considerable differentiation against goods vehicles as compared with public service vehicles. One can hardly dispute that there is that differentiation, although I do not want to go into a mass of figures.

The only other point is that relating to operating costs—which were referred to by more than one hon. Member. An analysis of the expenditure of operators of more than five buses or coaches, excluding the London Transport Executive, shows that in 1954–55 the cost of licences of all kinds was 0.56d. per vehicle mile out of a total cost of 22.85d. per vehicle mile. I think that those figures show clearly that the reduction in duty proposed would not have any significant effect on the operating costs.

Mr. D. Jones

That analysis is misleading. The hon. Gentleman takes the big cities, where there are dozens of vehicles operating continuously all day, and compares them with the rural and semi-rural areas, where the operators have to put numbers of vehicles on the road early in the morning and late at night and only have them on the road for about three hours a day. That clearly shows that to average it out in this way is simply nonsense.

Sir E. Boyle

I have not, of course, got breakdown figures relating exclusively to the big cities, but there is that comparison between the 0.56d. and the 22.85d., and even if one excludes the big cities I do not think there is as much in the hon. Gentleman's point as he made out.

It is, then, for those reasons that I must ask the House to resist the new Clause, and I can assure the House that my right hon. Friend has looked at it very carefully before coming to his conclusion.

5.0 p.m.

Mr. John Cronin (Loughborough)

I listened to the Economic Secretary with some interest. He had one piece of praise for the proposed new Clause, which was that it went entirely against the principles of the Budget. That was praise, because the Budget is one of the most disappointing that we have had.

I had some difficulty in following the arguments of the Economic Secretary. He said that public service vehicles had a large seating capacity and used the road more, and therefore caused greater wear. That was a valid point. The 50-seater bus does cause more wear to the road than a four-seater car. We ought, however, to consider the amount of wear of the road per passenger carried. That is the whole difference in the argument. Admittedly a public service vehicle causes more wear than a Rolls-Royce, but in one case 50 passengers are carried and in the other case one passenger, or perhaps one passenger and a chauffeur.

The hon. Gentleman said, on the difference in cost, that .56d. per vehicle mile would be the saving against an operating cost of 22.85d. That is a saving of 2 per cent., a marginal saving, but all road transport works on a marginal basis in expanding its service and working out its profits and losses. If this concession were made it would represent a very big difference to rural areas, which suffer severely. It would also have a great psychological effect. I come from an area in which there are many farmers and coal miners, and where road transport is a very great problem. Our local industries are of the greatest importance. Farmers and coal miners are most deserving people, yet they often find themselves in the utmost difficulty about transport. Something should be done to assist them.

The tax is retrogressive in every way. It is rather like the tax on windows of about 150 years ago, because it is a tax upon efficiency and amenity. My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) pointed out that in the Second Schedule of the Vehicles (Excise) Act, 1949, there is a tax of £57 12s. on vehicles holding more than 32 persons. My hon. Friend did not mention it, but there is a tax on top of that of £1 4s. for every additional passenger carried. Apparently the more a vehicle takes people off the roads, reduces congestion and lessens the danger of casualties, the more severely it is taxed. That principle cannot be justified by any enlightened legislature.

There is some purpose in a tax based upon commodities which are of doubtful social value. I would not argue much about the taxation of alcohol, which has deleterious effects, or a tax on tobacco, which is the basis of an innocuous but somewhat self-indulgent habit; but nobody travels on a public service vehicle from choice. It is in no sense a luxury or an indulgence. It is often a rather grim and grisly necessity which many hon. Members, particularly on this side of the House, face with apprehension and doubt.

Mr. Cyril Bence (Dunbartonshire, East)

I am surprised that my hon. Friend the Member for Loughborough (Mr. Cronin) should say that. On two occasions since I have been a Member of this House I have had the temerity to accept the offer of a lift from another hon. Member. I assure my hon. Friend that I was a bag of nerves at the end of the journey on both occasions. I have never had that experience in a public service vehicle.

Mr. Dye

My hon. Friend will never get another lift.

Mr. Cronin

I can sympathise with my hon. Friend.

What I had in mind was not the nervous effect of travelling in a public vehicle, but costs. Even efficient services have high operating costs. If I were to take a public service vehicle from Ashby-de-la-Zouch to Loughborough, a distance of 12 miles, I should have to go by a circuitous route taking about two hours. Higher operating costs affect the charges made by public vehicles, in spite of the great attempts that are made to keep them reasonable.

The tax will have a direct effect in our rural areas, and upon members of the community who are of very great value, such as coal miners and agricultural workers. If we agree to the proposed new Clause it will be an indication to the country that we are making some attempt to cope with inflation.

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

I had occasion to say yesterday that the Economic Secretary is always polite and considerate, and I meant it. If I measure him by his usual standard, I must say that he has been inconsiderate today. He has not given a serious reply. He treated this new Clause far too lightly.

He explained that the subject was new to him and that he had not spoken on it before. He also made mention of the fact that the hon. Member for Rye (Mr. Godman Irvine), his own Member of Parliament, was present. I would not be surprised if the hon. Member shares the view of the majority of the Members of the House in wishing that the Economic Secretary had not spoken at all.

My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) moved the proposed new Clause with great knowledge and skill. One of my hon. Friends drew an analogy between a public service vehicle, the Rolls-Royce of the worker, and the car in which the businessman goes to business, he being a worker in a Rolls-Royce. My hon. Friend pointed out that the tax discriminated, because it was heavier on the public service vehicle than on the Rolls-Royce. My hon. Friend did not add that the worker does not get any tax relief on the public service vehicle whereas the user of the Rolls-Royce can put it down to his business account.

Mr. Bence

Like the Daimler.

Mr. Bottomley

I think we had better forget all about the Docker business. I have, anyhow. The less we have to say about him the better.

One argument which the Economic Secretary used about cost was not too powerful. On this side of the House we have continually taken the view that the whole field of public transport is so important to our economy that we ought to take off whatever burden is imposed upon it, if it is possible to do so. I readily agree that, with the great amount of revenue that is received now from the taxation of transport generally, it would be difficult for any Chancellor to suggest that it should be done away with, but the very heavy tax justifies relief in one quarter or another. We tried, without success, on diesel oil. The proposed new Clause is another way, and we hoped that the Chancellor could meet our wishes.

I will try to give one or two other arguments in addition to the powerful ones put forward by my hon. Friend the Member for Enfield, East. In view of modern transport needs, we should do everything possible to ensure that transport is not run at a loss and is able to keep on the roads to serve the community, not only so as to make a profit but possibly as a social service. It is important that transport should convey men and women to and from their work as speedily as can be. If we have a further distribution of industry, it will be necessary sometimes to have longer journeys, which can be done more expeditiously and efficiently if transport can be provided. We cannot expect that transport to be provided if losses are made such as we have heard about this afternoon. That is particularly the case in the rural areas.

One of the reasons given by the Economic Secretary against reducing the excise tax in this case was that it would not be fair. I do not know on what he bases that argument. As I understood it, it was that a public transport vehicle is heavy and is a greater liability because it causes more wear and tear on the roads than does a private vehicle. That is not a very convincing argument because, whereas on an average a car carries four passengers, a public service vehicle carries very many passengers. If we worked out the cost per head of those carried, we would find that the argument is not convincing and not one which should be put forward in order to defeat this Clause.

I stress the need for a reduction in this tax in order to offset losses, especially in the rural services. The hon. Member for Gravesend (Mr. Kirk) has the honour to represent a constituency in the same part of Kent as my constituency. I think he will confirm that we get complaints from constituents and others of the need for bus services and public transport services in very important centres which are developing for industrial purposes. I am sure that view would be shared by hon. Members on both sides of the House. If we are to build up our industry it is necessary to provide cheap passenger transport.

That is also necessary if we are to build up our export trade. The two are linked together. If we are to limit the output of passenger service vehicles, which are in demand all over the world, it will mean that to that extent we shall limit our opportunities of building up a great industry providing export potential and thereby helping the economy of the country.

The Economic Secretary also said that this cannot be done now. I do not know when these things can be done. He said that if this were conceded there would be pressure for a similar concession for commercial vehicles and others. I ask him to consider how the Chancellor of the Exchequer pushed all that aside this afternoon when, quite rightly, he conceded the claims of holders of the Victoria Cross. Why cannot the Economic Secretary take the same view in this instance and say that this concession shall apply only to public service vehicles? if he would do that it would benefit the nation as a whole. The hon. Gentleman ought to look at this again and not to turn it down. I ask him to reconsider the matter. If he will not I shall have no alternative but to ask my hon. Friends to divide the House.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 196, Noes 245.

Division No. 261.] AYES [5.14 p.m.
Ainsley, J. W. Grimond, J. Paget, R. T.
Albu, A. H. Hale, Leslie Paling, Will, T. (Dewsbury)
Allaun, Frank (Salford, E.) Hall, Rt. Hn. Glenvil (Colns Valley) Pannell, Charles (Leeds, W.)
Allen, Arthur (Bosworth) Hamilton, W. W. Parkin, B. T.
Allen, Scholefield (Crewe) Harrison, J. (Nottingham, N.) Pearson, A.
Anderson, Frank Hastings, S. Plummer, Sir Leslie
Awbery, S. S. Hayman, F. H. Popplewell, E.
Bacon, Miss Alice Healey, Denis Price, J. T. (Westhoughton)
Balfour, A. Henderson, Rt. Hn. A. (Rwly Regis) Price, Philips (Gloucestershire, W.)
Bence, C. R. (Dunbartonshire, E.) Herbison, Miss M. Probert, A. R.
Benson, G. Hobson, C. R. Proctor, W. T.
Beswick, F. Holman, P. Pryde, D. J.
Blackburn, F. Holmes, Horace Randall, H. E.
Blenkinsop, A. Holt, A. F. Rankin, John
Boardman, H. Howell, Charles (Perry Barr) Redhead, E. C.
Bottomley, Rt. Hon. A. G. Howell, Denis (All Saints) Reeves, J.
Bowden, H. W. (Leicester, S. W.) Hoy, J. H. Reid, William
Bowles, F. G. Hubbard, T. F. Roberts, Albert (Normanton)
Boyd, T. C. Hughes, Cledwyn (Anglesey) Roberts, Goronwy (Caernarvon)
Braddock, Mrs. Elizabeth Hughes, Emrys (S, Ayrshire) Robinson, Kenneth (St. Pancras, N.)
Brockway, A. F. Hughes, Hector (Aberdeen, N.) Royle, C.
Broughton, Dr. A. D. D. Hunter, A. E. Shinwell, Rt. Hon. E.
Brown, Rt. Hon. George (Belper) Hynd, H. (Accrington) Short, E. W.
Brown, Thomas (Ince) Hynd, J. B. (Attercliffe) Silverman, Julius (Aston)
Burke, W. A. Irving, S. (Dartford) Silverman, Sydney (Nelson)
Burton, Miss F. E. Janner, B. Skeffington, A. M.
Butler, Mrs. Joyce (Wood Green) Jay, Rt. Hon. D. P. T. Slater, J. (Sedgefield)
Castle, Mrs. B. A. Jeger, George (Goole) Smith, Ellis (Stoke, S.)
Champion, A. J. Jeger, Mrs. Lena (Holbn & St. Pncs, S.) Snow, J. W.
Clunie, J. Jenkins, Roy (Stechford) Soskice, Rt. Hon. Sir Frank
Coldrick, W. Johnson, James (Rugby) Sparks, J. A.
Collick, P. H. (Birkenhead) Jones, Rt. Hon. A. Creech (Wakefield) Steele, T.
Collins, V. J. (Shoreditch & Finsbury) Jones, David (The Hartlepools) Stewart, Michael (Fulham)
Cove, W. G. Jones, J. Idwal (Wrexham) Stokes, Rt. Hon. R. R. (Ipswich)
Craddock, George (Bradford, S.) Jones, T. W. (Merioneth) Strauss, Rt. Hon. George (Vauxhall)
Cronin, J. D. Key, Rt. Hon. C. W. Stross, Dr. Barnett (Stoke-on-Trent, C.)
Crossman, R. H. S. King, Dr. H. M. Summerskill, Rt. Hon. E.
Cullen, Mrs. A. Lawson, G. M. Swingler, S. T.
Daines, P. Ledger, R. J. Thomas, George (Cardiff)
Dalton, Rt. Hon. H. Lee, Frederick (Newton) Thomson, George (Dundee, E.)
Darling, George (Hillsborough) Lee, Miss Jennie (Cannock) Thornton, E.
Davies, Rt. Hon. Clement (Montgomery) Lipton, Lt.-Col. M. Timmons, J.
Davies, Ernest (Enfield, E.) Logan, D. G. Tomney, F.
Davies, Stephen (Merthyr) Mabon, Dr. J. Dickson Ungoed-Thomas, Sir Lynn
Deer, G. MacColl, J. E. Usborne, H. C.
de Freitas, Geoffrey McInnes, J. Weitzman, D.
Delargy, H. J. McKay, John (Wallsend) Wells, Percy (Faversham)
Dodds, N. N. McLeavy, Frank Wells, William (Walsall, N.)
Dugdale, Rt. Hn. John (W. Brmwch) MacPherson, Malcolm (Stirling) West, D. G.
Dye, S. Mahon, Simon Wheeldon, W. E.
Edwards, Rt. Hon. John (Brighouse) Mann, Mrs. Jean White, Mrs. Eirene (E. Flint)
Edwards, Rt. Hon. Ness (Caerphilly) Marquand, Rt. Hon. H. A. Wilkins, W. A.
Edwards, W. J. (Stepney) Mayhew, C. P. Williams, David (Neath)
Evans, Albert (Islington, S. W.) Messer, Sir F. Williams, Rev. Llywelyn (Ab'tillery)
Evans, Edward (Lowestoft) Mitchison, G. R. Williams, Rt. Hon. T. (Don Valley)
Evans, Stanley (Wednesbury) Moody, A. S. Williams, W. R. (Openshaw)
Fernyhough, E. Morrison, Rt. Hn. Herbert (Lewis'm, S.) Williams, W. T. (Barons Court)
Flenburgh, W. Mort, D. L. Willis, Eustace (Edinburgh, E.)
Fraser, Thomas (Hamilton) Moss, R. Wilson, Rt. Hon. Harold (Huyton)
Gaitskell, Rt. Hon. H. T. N. Mulley, F. W. Winterbottom, Richard
Gibson, C. W. Oliver, G. H. Woodburn, Rt. Hon. A.
Gooch, E. G. Oram, A. E. Yates, V. (Ladywood)
Gordon Walker, Rt. Hon. P. C. Orbach, M. Younger, Rt. Hon. K.
Greenwood, Anthony Oswald, T. Zilliacus, K.
Grenfell, Rt. Hon. D. R. Owen, W. J.
Grey, C. F. Padley, W. E. TELLERS FOR THE AYES:
Mr. Rogers and Mr. John Taylor
Agnew, Cmdr. P. G. Armstrong, C. W. Baldwin, A. E.
Aitken, W. T. Ashton, H. Balniel, Lord
Allan, R. A. (Paddington, S.) Astor, Hon. J. J. Barter, John
Alport, C. J. M. Atkins, H. E. Baxter, Sir Beverley
Amory, Rt. Hn. Heathcoat (Tiverton) Baldock, Lt.-Cmdr. J. M. Beamish, Maj. Tufton
Bell, Philip (Bolton, E.) Head, Rt. Hon. A. H. Noble, Comdr. A. H. P.
Bell, Ronald (Bucks, S.) Heath, Rt. Hon. E. R. G. Oakshott, H. D.
Bennett, F. M. (Torquay) Henderson, John (Cathcart) Ormsby-Gore, Hon. W. D.
Bevins, J. R. (Toxteth) Hill, Rt. Hon. Charles (Luton) Orr-Ewing, Charles Ian (Hendon, N.)
Bidgood, J. C. Hill, Mrs. E. (Wythenshawe) Orr-Ewing, Sir Ian (Weston-S-Mare)
Biggs-Davison, J. A. Hill, John (S. Norfolk) Osborne, C.
Birch, Rt. Hon. Nigel Hirst, Geoffrey Page, R. G.
Bishop, F. P. Holland-Martin, C. J. Partridge, E.
Black, C. W. Hope, Lord John Peyton, J. W. W.
Body, R. F. Hornby, R. P. Pilkington, Capt. R. A.
Bossom, Sir Alfred Horobin, Sir Ian Pitman, I. J.
Boyle, Sir Edward Horsbrugh, R. Hon. Dame Florence Pitt, Miss E. M.
Brains, B. R. Howard, Hon. Greville (St. Ives) Pott, H. P.
Bromley-Davenport, Lt.-Col. W. H. Howard, John (Test) Powell, J. Enoch
Brooke, Rt. Hon. Henry Hudson, Sir Austin (Lewisham, N.) Price, Henry (Lewisham, W.)
Brooman-White, R. C. Hughes Hallett, Vice-Admiral J. Prior-Palmer, Brig. O. L.
Browne, J. Nixon (Craigton) Hughes-Young, M. H. C. Profumo, J. D.
Bryan, P. Hurd, A. R. Raikes, Sir Victor
Buchan-Hepburn, Rt. Hon. P. G. T. Hutchison, Sir Ian Clark (E'b'gh, W,) Ramsden, J. E.
Bullus, Wing Commander E. E. Hutchison, Sir James (Scotstoun) Rawlinson, Peter
Burden, F. F. A. Hyde, Montgomery Redmayne, M.
Channon, H. Iremonger, T. L. Rees-Davies, W. R.
Chichester-Clark, R. Irving, Bryant Godman (Rye) Remnant, Hon. P.
Clarke, Brig. Terence (Portsmth, W.) Jenkins, Robert (Dulwich) Ridsdale, J. E.
Cole, Norman Jennings, J. C. (Burton) Rippon, A. G. F.
Cooper, Sqn. Ldr. Albert Johnson, Dr. Donald (Carlisle) Robertson, Sir David
Cooper-Key, E. M. Johnson, Eric (Blackley) Rodgers, John (Sevenoaks)
Cordeaux, Lt.-Col. J. K. Joynson-Hicks, Hon. Sir Lancelot Roper, Sir Harold
Corfield, Capt. F. V. Keegan, D. Ropner, Col. Sir Leonard
Craddock, Beresford (Spelthorne) Kerby, Capt. H. B. Russell, R. S.
Crowder, Sir John (Finchley) Kerr, H. W. Sandys, Rt. Hon. D.
Cunningham, Knox Kershaw, J. A. Schofield, Lt.-Col. W.
Currie, G. B. H. Kimball, M. Scott-Miller, Cmdr. R.
Dance, J. C. G. Kirk, P. M. Sharples, R. C.
Davidson, Viscountess Lagden, C. W. Shepherd, William
D'Avigdor-Goldsmid, Sir Henry Lambert, Hon. G. Simon, J. E. S. (Middlesbrough, W.)
Deedes, W. F. Leavey, J. A. Spearman, Sir Alexander
Digby, Simon Wingfield Leburn, W. G. Speir, R. M.
Donaldson, Cmdr. C. E. McA. Legge-Bourke, Maj. E. A. H. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Doughty, C. J. A. Legh, Hon. Peter (Petersfield) Stevens, Geoffrey
du Cann, E. D. L. Lindsay, Hon. James (Devon, N.) Steward, Harold (Stockport, S.)
Dugdale, Rt. Hn. Sir T. (Richmond) Linstead, Sir H. N. Steward, Sir William (Woolwich, W.)
Duncan, Capt. J. A. L. Lloyd, Maj. Sir Guy (Renfrew, E.) Stoddart-Scott, Col, M.
Duthie, W. S. Lloyd, Rt. Hon. Selwyn (Wirral) Studholme, Sir Henry
Eccles, Rt. Hon. Sir David Lloyd-George, Maj. Rt. Hon. G. Taylor, Sir Charles (Eastbourne)
Eden, Rt. Hn. Sir A. (Warwick&L'm'tn) Longden, Gilbert Taylor, William (Bradford, N.)
Eden, J. B. (Bournemouth, West) Lucas, P. B. (Brentford & Chiswick) Teeling, W.
Errington, Sir Eric Lucas-Tooth, Sir Hugh Thomas, Leslie (Canterbury)
Erroll, F. J. Mackeson, Brig. Sir Harry Thomas, P. J. M. (Conway)
Farey-Jones, F. W. Mackie, J. H. (Galloway) Thompson, Kenneth (Walton)
Fell, A. Maclay, Rt. Hon. John Thompson, Lt.-Cdr. R. (Croydon, S.)
Finlay, Graeme McLean, Nell (Inverness) Thornton-Kemsley, C. N.
Fisher, Nigel MacLeod, John (Ross & Cromarty) Tiley, A. (Bradford, W.)
Fletcher-Cooke, C. Macmillan, Rt. Hn. Harold (Bromley) Tilney, John (Wavertree)
Fort, R. Macpherson, Niall (Dumfries) Touche, Sir Gordon
Freeth, D. K. Maddan, Martin Turner, H. F. L.
Gammans, Sir David Maitland, Cdr. J. F. W. (Horncastle) Tweedsmuir, Lady
George, J. C. (Pollok) Maitland, Hon. Patrick (Lanark) Vane, W. M. F.
Gibson-Watt, D. Markham, Major Sir Frank Vickers, Miss J. H.
Glover, D. Marlowe, A. A. H. Vosper, D. F.
Godber, J. B. Marshall, Douglas Wakefield, Edward (Derbyshire, W.)
Gomma-Duncan, Col. Sir Alan Mathew, R. Wakefield, Sir Wavell (St. M'lebone)
Gower, H. R. Maudling, Rt. Hon. R. Walker-Smith, D. C.
Graham, Sir Fergus Mawby, R. L. Wall, Major Patrick
Grant, W. (Woodside) Maydon, Lt.-Comdr. S. L. C. Ward, Hon. George (Worcester)
Grant-Ferris, Wg Cdr. R. (Nantwich) Medlicott, Sir Frank Ward, Dame Irene (Tynemouth)
Green, A. Milligan, Rt. Hon. W. R. Waterhouse, Capt. Rt. Hon. C.
Grimston, Hon. John (St. Albans) Molson, Rt. Hon. Hugh Watkinson, Rt. Hon. Harold
Grimston, Sir Robert (Westbury) Monckton, Rt. Hon. Sir Walter Whitelaw, W.S.I. (Penrith & Border)
Gurden, Harold Moore, Sir Thomas Williams, Paul (Sunderland, S.)
Hall, John (Wycombe) Mott-Radclyffe, C. E. Williams, R. Dudley (Exeter)
Harris, Frederic (Croydon, N. W.) Nabarro, G. D. N. Wilson, Geoffrey (Truro)
Harris, Reader (Heston) Nairn, D. L. S. Woollam, John Victor
Harrison, A. B. C. (Maldon) Neave, Airey Yates, William (The Wrekin)
Harrison, Col. J. H. (Eye) Nicholls, Harman
Harvey, John (Walthamstow, E.) Nicholson, Godfrey (Farnham) TELLERS FOR THE NOES:
Harvie-Watt, Sir George Nicolson, N. (B'n'm'th, E. & Chr'ch) Mr. Wills and Mr. Barber.
Hay, John Nield, Basil (Chester)