§ Exemption shall be granted from tax chargeable under Schedule D in respect of the profits of a trade set up after the fifth day of April, nineteen hundred and fifty-six, which consists of the working of a non-ferrous metalliferous mine within the United Kingdom, but such exemption to tax shall only apply to the profits derived from this operation of the mine during the period of thirty-six months commencing with the day on which the mine first came into regular production of ore. In this section "regular production of ore" means production in reasonable commercial quantities and shall not be deemed to apply to ore extracted in the development period in searching for or in discovering and testing deposits or in winning access thereto.—[Mr. D. Marshall.]
§ Brought up, and read the First time.
§ The Temporary Chairman (Sir Austin Hudson)
I suggest that at the same time we should discuss the next proposed new Clause in the name of the same hon. Member, "Relief from profits tax for development of new metalliferous mines within the United Kingdom", and also the proposed new Clause in the name of the hon. Member for West Lothian (Mr. J. Taylor), "Exemption from excise duty of Scottish shale oil".
§ Mr. Marshall
The same principle underlies both Clauses in my name and that of my hon. Friends, and I can readily understand the second being allowed to be discussed with the first. If the Chancellor sees my argument for the first Clause, it would be reasonable to expect him to accept the second Clause as well.
No doubt the Chancellor has read the speech that I made during the Budget debate. Its purpose was to allow the Treasury to formulate opinion about the principle embodied in the two Clauses. The reason for the Clauses is clearly stated in them. There is, however, one matter which has caused a certain degree of confusion. There is another proposed new Clause which hon. Members may have thought had an application similar to those about which I am now speaking. This Clause to which I refer deals with 1376 allowances in respect of capital expenditure on sources of mineral supplies, and this Clause would in no way help the Cornish mining belt. As the Cornish mines are leased on a royalty basis, the question of capital expenditure does not arise.
The Chancellor will no doubt remember certain words that he used at Newcastle on 25th May. He said:We have no raw materials except coal and iron, and now we are importing both.I assume that he had temporarily forgotten our export of china clay, at present the United Kingdom's largest export of basic raw material. With regard to the metalliferous minerals to which I am referring, he may well have thought, as many of my right hon. Friends did when the Conservative Party was in opposition, that our method of taxation was such that the development of those minerals had been deterred, and, consequently, not sufficient of them was mined to form an export.
I am sure that my right hon. Friend will also have read a book by Mr. Lyde Caunter, which I sent him a short time ago, on the future of metalliferous mining in Great Britain. Mr. Caunter, the President of the Cornish Mining Development Association and a Governor of the Camborne School of Mines, puts very briefly and cogently the case that I am making tonight. A passage directly related to the Clause reads:Those people who are in a position to judge the matter assert that the taxation laws of this country are the deterrent which stifles initiative at birth, with the result that the Treasury gets no revenue from new enterprises, and the country does not benefit from the production of the new wealth which would otherwise be produced.10.45 p.m.
Home production of non-ferrous minerals is a matter of national importance. It is not a matter which concerns only those people who live in the different areas which may be able to produce these minerals. Many millions of pounds worth of these minerals still lie hid, a fact which is not disputed by anyone who has studied this subject. It may be of interest to the Committee to recollect that Madame Curie's first experiments were conducted with uranium ore obtained from a Cornish tin mine near St. Austell.
1377 The object of the new Clause is to stimulate enterprise and, by that stimulation, to uncover this wealth. I assume that the Chancellor of the Exchequer will not suggest that his opposite numbers in Canada, Australia, Eire, and the United States of America, although out of step with him, are necessarily wrong. Sometimes it is reasonable to suppose that what is done on the other side of the Irish Sea may be a proper thing to do on this side of the Irish Sea.
All the nations which I have mentioned have produced legislation more or less in conformity with the new Clause. The latest to do that is Eire. It is interesting to note that since Eire passed this legislation, only a few months ago, there has been an immediate effect—an actual, "seeable" effect, not just something on paper—in Eire which is benefiting from that legislation.
Under the Canadian system, which is more or less embodied in the Clause, the metalliferous and non-bedded mines are not subject to Income Tax on income derived from the operation of the mine during a period of 36 months commencing with the day on which the mine came into production. Hon. and right hon. Members will note that those are more or less the words which my hon. Friends and I have selected for the Clause. We do not necessarily say that the Clause is properly drafted. It is the principle lying behind the Clause that is important. We do not have the access to the Parliamentary draftsmen which the Government, naturally, have.
Within the Canadian system there is a special depletion allowance made on a deduction of income of 33⅓ per cent. of the net aggregate profits; there are capital cost allowances with specially accelerated rates for periods of amortisation of mining machinery and equipment and certain underground works; there are special pre-production allowances and other smaller matters attached to it, which more or less conform with the principle underlying the Clause.
When we were in opposition these matters were debated in the House of Commons at some length. I well remember that from 1946 onwards the Lord Privy Seal and others supported this principle. I equally remember the Chancellor of that day refusing it, and the Division which occurred.
1378 If the Chancellor should see fit tonight to give a negative answer to the proposal contained in the Clause, it might well be that he will use the argument that it is not a commercial proposition to produce this wealth. I would like hon. Members to realise that if that is the case he has nothing to lose by accepting the Clause, because it does not operate until a profitability arises from the exploration and exploitation of our mineral wealth. If, on the other hand, I should be right upon this matter, and considerable mineral wealth is developed, he stands to gain immeasurably. It is interesting to note that those who are technically expert on this subject not only believe that that considerable wealth is there, but put figures to it which are quite staggering.
There are definite factors arising which lead one to believe that sums of £300 million or £400 million are by no means too high to contemplate in this connection, should these projects, in fact, be started. As far as I can see, the Chancellor wins all round by the acceptance of the Clause. It is my view that we shall never overcome inflation for any length of time without the development and discovery of new means of wealth. if hon. and right hon. Members think deeply upon this subject they would have a hard battle to explain how inflation can be stopped without the development of some new sources of wealth. What could be better than developing the Cornish mining belt?
So far, we have been listening to hon. Members asking for concessions in one direction or another, for an industry or for individuals. That is quite proper and right in any Finance Bill debates. But in this case we are asking for no subsidy, we are asking for no money; we are asking for an opportunity to develop the mineral wealth of the United Kingdom, and that is all. I trust that the Chancellor will see reason in my argument. It may help him in combating inflation and developing our mineral wealth. If it were successful, as I believe it would be, it might be of such a magnitude as would literally alter our whole economic life. It cannot possibly do any harm. It cannot take anything from the Revenue. If it is successful it can give a great deal to the Revenue.
I do not wish to delay the Committee any longer. I hope that my hon. Friends 1379 will speak in support of the Clause. I sincerely believe that it is not—as some hon. Members might think—an effort to try to develop one part of the United Kingdom. The reason behind our tabling the Clause is that some of us believe that if the Chancellor accepts it, or the principle underlying it, the country may have an opportunity of producing new wealth of such a nature as to alter the whole of our economic life.
§ Mr. John Taylor (West Lothian)
The hon. Member for Bodmin (Mr. D. Marshall) has moved his new Clause in order to provide the opportunity for development to a very important group of industries which, as he says, have their ramifications and their importance in every section of industry in the country. My new Clause which is being discussed with the two Clauses in the name of the hon. Member for Bodmin and other hon. Members is intended to exempt shale oil from Excise Duty. The reason for the Clause is not primarily to secure the development of the oil industry of Scotland. but its survival.
Very few people know that we produce oil from shale in this country and that this industry, which is the pioneer oil industry of the world, is situated in the constituencies represented by my hon. Friend the Member for Midlothian (Mr. Pryde) and myself. Oil was produced from shale in Scotland before a drop of oil was produced anywhere in the word either from oil wells or by any other means.
The shale oil industry is now suffering a very serious and steady contraction. If that contraction continues at its present rate this old and efficient pioneer oil industry which produces a very high quality shale oil will vanish altogether. The industry would be comparatively prosperous were it not for the existence of taxation. This matter is in some respects a hardy annual, a sort of half-hardy bi-annual inasmuch as it comes up for discussion about every other year. But this is the first time that my hon. Friend and I have tabled a Clause advocating not merely remission of taxation or assistance to the industry in some partial way, but the complete exemption of this industry from taxation.
When on previous occasions we have argued in favour of partial exemption, the Treasury reply has been that it was 1380 not possible to give preference to one section only of the indigenous hydrocarbon oil production, and that it would have to be granted to every section of the industry. I could never follow the logic of that. I cannot see why it is not possible to give relief to one hard-hit section of the industry. There are very good reasons why relief should be given to this one specific section of our home oil industry. In the main, other sections of the hydro-carbon oil industry in this country produce oil as a by-product of other main products.
In this case alone, with the exception of the small proportion of oil produced from oil borings in Nottinghamshire, the oil produced from shale is the main product of the industry. We have our byproducts which, incidentally, are valuable to the national economy. We produce a special high grade sulphate of ammonia which is a very valuable fertiliser and a wax which is used by a number of industries, particularly by the electrical industry.
We produce bricks from the spent shale. We produce detergents of a very strong character for industry and of a milder character for domestic use. As I have said before in this Committee, this is an industry comparable to the pig-breeding industry—we use everything but the squeal.
The abolition of the tax on shale oil would do no harm whatever to the other sections of the indigenous hydro-carbon oil industry and would be the salvation of the shale oil part. The cost would not be great. In the last financial year the amount of taxation was about £1,100,000. Because of current contractions in the industry it would in any case probably be considerably less next year—certainly less than £1 million.
When talking of costs we have to ask ourselves what is the cost of oil. As a commodity, its cost is very difficult to assess. For example, how much is added to the cost of Middle East oil by our operations in Cyprus? What is the cost to the national economy of the changes in our oil organisation which we shall be discussing tomorrow? The world runs on oil. It is a very important, politically inflammable liquid at the present time. The world will continue to run on oil during the next generation, in 1381 spite of all our talk of the development of atomic energy as a source of power for industry.
It is really incredible that a Government in this country today should permit, by inaction—if this new Clause is not approved—any source of oil to go. As far as I can see, it is certain that unless we have remission of taxation here the shale oil industry will continue to contract and, sooner or later, will die. We have been told quite recently by the Economic Secretary that this industry already has a substantial subsidy in the shape of a 50 per cent. preference—a preference of 1s. 3d. per gallon in Excise Duty. I cannot follow that logic. To claim that as a subsidy is rather like the highwayman who takes the lady's jewels but gallantly hands back her purse with a flourish as a gift from himself and rides away feeling that he has been generous.
The industry itself gives a subsidy to the nation, though it is an unseen one. To some extent it saves us dollars because every drop of oil we produce here saves us buying it elsewhere, and some of that must be dollar oil. It also saves tankers, and in other ways it makes a very valuable contribution to our economy. How else can we save this industry except in this way? The price of its product is fixed. If its costs rise, as they have been rising steadily, in common with the costs of production in every other industry, it cannot raise its price accordingly except by the general increase agreed to by the oil industry, and the oil industry has been exceptionally careful about increases in its price rates.
We have tried every other way to get assistance for this industry and my hon. Friend and I have this thought in our minds. Our plea is not merely for the salvation of an industry—that, surely is important enough—but it is also for the salvation of many of our constituents who are engaged in this industry. Already, a quarter of the manpower of the industry has been declared redundant. A few of the men have found continued employment in the oil refinery at Grangemouth, which is not far from the shale oil fields. Admittedly, that involves some rather awkward bus journeys, but they have 1382 this employment. Unfortunately, they represent fewer than 10 per cent. of those declared redundant.
The fact that this industry seems to be under a sentence of death means that the whole morale of those workers who are continuing in it has been reduced. Younger men are not going into it, and the older ones who have families are seeking ways and means of getting out. This is a small industry, employing fewer than 3,000 people—the figure used to be 10,000 or 12,000—and it produces only about one-tenth of our indigenous hydrocarbon oil. But it is Scottish oil; it is British oil. It is good quality oil, and we ought not to let any source of oil production go out of existence.
For that reason, and because we believe that this is in the nature of a test case for the Government's intentions about full employment, we appeal to the Chancellor. Do the Government intend, remembering what they say about full employment, to stand by and see a whole industry slaughtered in this way? Displaced workers have to travel long distances, but even in the outlying areas saturation point is being reached. Potential unemployment, which has not yet shown itself to any appreciable extent, is a continuous worry to constituents of my hon. Friend and myself.
This small concession for which we ask is justified as being necessary for the salvation and continued operation of an efficient and old and valued industry which Scotland has regarded with some pride. This industry has given a great many technical devices to the oil industry of the world. It has some fine refineries at Pumpherston and Westwood, but so far as my constituency is concerned it is dead. The industry is confined to the Midlothian constituency, but a number of the workers still live in my constituency. Their homes are there and it is for them, and their families, and for this ancient and valuable industry that I make this very sincere plea to the Chancellor tonight.
§ Sir Harold Roper (Cornwall. North)
I hope that the hon. Gentleman the Member for West Lothian (Mr. J. Taylor) will forgive me if I do not follow him in the problem which he has so forcibly put foward and with which I have a very full measure of sympathy. It differs, how- 1383 ever, from the object of the new Clause which my hon. Friends and I have tabled and which was so ably moved by my hon. Friend the Member for Bodmin (Mr. Marshall).
Not only does the problem put forward on behalf of the Scottish shale oil industry differ froth our problem in Cornwall, but the remedy differs, also. Our Cornish problem relates to the fact that below the surface of our land there are undoubtedly non-ferrous minerals in substantial quantity; but new development has come to a complete stop because of the high level of taxation.
A hundred years ago, we were producing in this country non-ferrous metals which, at today's prices, would be worth £17 million a year. Today, the production figure is down to about £1 million. In those days we were producing a quantity of copper, but probably there is nothing left of that metal worth developing. Tin and lead have been mined in considerable quantity and the experts tell us that quantities still remain.
Then there is wolfram, which nowadays is an important metal. We do not know its potential production figure because in the palmy days of the mining industry in this country it was regarded as a waste product. In the First World War, however, when we were badly in need of wolfram, it was developed to the extent of nearly £2 million at today's prices. In the Second World War we were again in serious need of wolfram and great efforts were made to recover it. If we were somewhat less successful than during the First World War, the reason was that many of our tin mines had closed.
It is important to recognise that the reason for the decline of the tin mining industry in this country, particularly in Cornwall, was not the exhaustion of the tin but the discovery of more cheaply produced alluvial tin in Malaya. Although the best of the tin in Cornwall may have been worked out, there is good reason to believe that there is plenty left, and we shall need to produce it some day.
In this situation, it is important to realise that in the world as a whole no substantial new source of tin has been discovered for a quarter of a century and more. As far as we know, we must continue to depend on the existing sources 1384 of supply. Of the tin now being produced, 60 per cent. is produced in the countries of South-East Asia. We are happy in the knowledge that the new Malaya has the firm intention of remaining within the Commonwealth. Nevertheless, we have too many eggs in, not one, but two, baskets, because the second of the world's important producing countries is Indonesia. These two baskets are in a part of the world which. today, is none too settled.
It should be mentioned also that before the war the most important wolfram-producing country in the world was China. That wolfram production today is completely lost to the free world behind the Bamboo Curtain. In these circumstances it is expedient to note that no new development is taking place in this country. No one will risk the heavy finance which is necessary for such speculative industry as tin mining if the fruits of success are to be taken away in taxation.
My hon. Friend the Member for Bodmin has described what is being done in other countries, especially Canada and, nearer home, in Ireland. We hope that the Chancellor will ask himself why those examples should not be followed in this country. It may be that he has had fear of setting an awkward precedent. Yesterday, in this Committee, we were discussing Premium Bonds. Perhaps the Chancellor realised that the bonds scheme could not be successful unless the prizes offered were free from taxation. I suggest that it is a short step, and, I hope, an easy step, for the Chancellor to take from the Premium Bond to acceptance of our new Clause, because unless it is accepted no development of tin will take place.
Before he rejects the Clause I hope that the right hon. Gentleman will consult the President of the Board of Trade, who was, at one time, a member of the Westwood Committee which reported on the mineral development of the United Kingdom. In a minority Report, he rejected what he called the two main conclusions of the Committee, but wound up with his own solution, his summary of which I will read to the Committee:I conclude that it is possible to further mineral exploration and development in the 1385 United Kingdom by reducing the general level of taxation, and the removal of the complex of administrative barriers which at present hamper and restrict it.Reduction of taxation was the solution put forward by my right hon. Friend at that time.
Most important of all, this Clause will cost the Treasury nothing, because unless it is passed there will be no new mines to pay tax. The intention of the Clause is to create conditions which will restore the industry to some degree of prosperity. If it is successful, the Treasury stands to gain in the revenue which must come from a successful industry. I hope that the Chancellor will see his way to accept the new Clause.
§ Mr. David J. Pryde (Midlothian)
In rising to support my hon. Friend the Member for West Lothian (Mr. J. Taylor), I wish to extend a welcome to the hon. Members on the other side of the Committee who have introduced the two other new Clauses, which are very useful. They can, for instance, dovetail into the objects of our proposed new Clause to do something which apparently some people have forgotten. The shale oil industry is not a dead industry, and rather than allow it to die the Committee ought to see to it that it is extended and expanded. As has been said, it is under sentence of death.
I have here the political register giving the number of electors affected by the shale-bearing area of Midlothian. More than 9,200 electors will be affected by the policy which the Government is pursuing today. Over 9,200 electors will be affected by the policy that is being pursued by the Government. I do not know how many are affected in West Lothian. The 9,200 do not all work in the employ of Scottish Oils operators, but nevertheless they include tradesmen, shop keepers, doctors, ministers, lawyers, and so on, and all these people are dependent upon the shale-producing area of Midlothian. In fact, Burn Grange, the colliery which a few years ago was the scene of a great disaster, is contained within a few yards. West Calder and eight large towns and villages in my constituency will be rendered derelict.
While there may be some relief given to the unemployed in West Lothian, there can be none in Midlothian itself. The National Coal Board has told us that it can fully staff the coal mines of Mid- 1386 lothian by local labour, and even the agricultural land of that part of Midlothian is very poor indeed. In fact, in Scotland less than 20 per cent. of Scottish agricultural land is described as good.
Nor can we find any relief for the unemployed in the carpet weaving industry of Midlothian, because carpet weaving is in the doldrums, and our paper mills are in a very uncertain state. We are told that our men will require to go to the West Midlands or to Fife. Imagine the discontent which is being developed at Glenrothes, and one can understand that our people are not keen to shift to a place which is likely to be a storm centre.
As for the West Midlands, discussing the position with the local union officials of the N.U.M. on Sunday, I was told that there is no relief in this quarter because only recently one of our young men volunteered for work in Warwickshire and he was told that he could not be accepted. Nor could they accept any labour from Scotland because they were intending to get a large supply of former mining labour from the Standard motor works.
Some people imagine that the shale mining industry of Mid and West Lothian is subsidised. They also talk very carelessly about the imported oil not being in receipt of any subsidy. I intend to disabuse the minds of these people. Last Wednesday a deputation of the Shale Miners and Oil Workers Union of Mid and West Lothian met the Minister of Fuel and Power, the Economic Secretary to the Treasury and one of the Joint Under-Secretaries of State for Scotland. This problem to us is a major one. Our proposed new Clause emanates from a great human tragedy. The Chairman and the Secretary of the shale oil workers' union demonstrated that the industry did not receive one penny piece of subsidy from the Treasury. True, as my hon. Friend has pointed out, he and I on appeal to the previous Chancellor of the Exchequer obtained some satisfaction in that Scottish Oils was permitted to sell its product at something like a competitive price against what is termed "free" oil—the foreign imported oil.
This industry produces some of the finest and most valuable by-products in the country, and there is no reason why that should not be continued. Surely that is in itself a great asset to the nation and to the Treasury in saving dollars. 1387 I want to put out to hon. Members that, since the day the right hon. Gentleman the Member for Woodford (Sir W. Churchill) bought a controlling interest in the Anglo-Persian Oil Company, the British taxpayer has subsidised the importation of foreign oil. I, for one, have never criticised the right hon. Gentleman for that action. I regarded it as a masterpiece of foresight. But who paid first to square the sheiks of that region?
It is alleged that one of those Arab States is inhabited by people who can command, each and every one—man, woman and child—a sum approaching £1,000 each. That, I suggest, came from the British taxpayer. Who paid for the harbours used? Who paid for the armies to protect that oil? Who paid for the battleships, the aircraft? Was it not the British taxpayer? My hon. Friend says that we are engaged in work in Cyprus today which is allied to the oil route to Europe. That may be so or it may not, but I am not arguing that tonight. I suggest, however, that we paid the Arab Legion to defend the pipe-line. So it is apparent that there have been concealed subsidies for the so-called free oil and that it is not free oil at all.
The answers of Conservative Ministers are like the laws of the Medes and Persians, they never change. Browsing through some old HANSARDS in the Lobby, I came across the answer to a question put by the right hon. Thomas Johnston when he was in this House. He asked if the coal owners who were to shut down their pits were to be compensated, and what compensation would accrue to the rank and file of the miners. He was answered by the Minister of Mines of that day, who said, yes, the coal owners would get compensation and the workers could get the benefit of the labour exchange. That was the exact reply I received recently from the Minister of Labour when I asked what was to happen to our labour.
There is no chance of the redundant shale workers of Midlothian getting any relief in regard to employment, as I have suggested. So I suggest to this Committee that we embark on a constructive programme, and if the two proposed Clauses are accepted, then the road is clear. Because shale is not in an 1388 exhausted condition like the coal pits of that area where there is no hope for the unemployed there.
In Midlothian there are vast deposits of shale. All the measures which are evident in West Lothian are evident in Midlothian. It is known by proved operation that those shale measures come right round the foothills of the Pentlands on their eastern slopes, right down past Penicuik in my constituency. In fact they were worked when the Clippens Oil Company got into trouble with the old Edinburgh Water Trust and went back.
The new pit at Bilston Glen being sunk by the National Coal Board could easily tap those shale measures by driving level mines to the west, just as they expect to tap the coal measures by driving mines to the east. Not only would they tap the shale measures, they would also tap two seams of very good-class ironstone, and I am informed by old miners who have worked on the surface of the measures there—although at probably 80 or 90 fathoms deep—that there are other valuable measures.
We know that these shale measures crop out on the north shore of the Firth of Forth. I cannot say that they are the same measures—they have never been bored as the National Coal Board has bored the Firth for coal—but I think we can assume with a certain degree of accuracy that the measures go right through below the Firth.
I am going to suggest what I have suggested for years. When my late lamented friend Joseph Westwood, then Secretary of State for Scotland, outlined for me his plans for the importation of oil and the great expansion of Grangemouth, I pointed out that this would damage the welfare of both West Lothian and the western portion of Midlothian. Joseph Westwood said that there was no reason why there should not be a second edition of the Westwood refining plant in Midlothian which would be in the centre of a plentiful supply of labour, in the centre of good roads—non-existent in that part of the country where the mines are today—and in the centre of a railway system.
A bold policy would be far more appropriate to the problem facing West Lothian and Midlothian than allowing 1389 the district to be murdered. We cannot just lift people from the surroundings in which they have lived for 50 or 60 years. Many of the men are ageing and are past the stage when they can adapt themselves to new mines or anything else.
These are good, industrious men, and we ask that a sensible approach be made to the problem. There has not been a dispute in the industry there since 1924, and I am sure that in no other phase of mining life in Britain has there been a record of that description. I appeal to the Committee to consider what I and my hon. Friend have said, and I ask the Chancellor to do what any sensible person would do, maintain the industry in which these men have been engaged all their lives.
§ Mr. G. R. Howard (St. Ives)
I do not want to detain the Committee for more than a moment, but it is only right that I should speak because I have in my constituency one of the very few tin mines still working in Cornwall.
Of the future of the Geevor mine, it has been said in the book to which my hon. Friend the Member for Bodmin (Mr. D. Marshall) referred that it is well known to professional mining engineers and geologists that in the vicinity there ere large reserves of tin, and large, reserves are known to exist in the adjacent Levant mine. It is also said that the potential reserves of tin at Carn Brea, are estimated to be about £50 million.
Reference has been made to sources of tin, such as South-East Asia. We all hope that that tin will be available to us, but it seems to me that if we can do anything to develop our own supplies at home in peace time on a steadily progressive basis, it will help us in the event of any of the foreign sources being cut off. From the point of view of our own finances, it seems obvious that this would be of great advantage. If that is not done, what happened in the last war Swill be repeated; because when war tomes our supplies are cut off and there is a sudden panic order from the Government, which says, "You must spend anything, enormous sums of money, to get the tin." That was done in the last war. Then, as the submarine menace subsided,; so the interest in mining subsided as well.
We must remember that we still have the fear of another war—pray God it may never happen—but if it comes, it will be 1390 with a submarine menace such as we have never had before. It may well be that we shall be very grateful for any steps we take now to see that our tin mines are not only kept going in peace time but are such that we can readily expand the industry in time of war, for emergency, or for balance of payments reasons. Last year we had a magnificent production of 630 tons, which is a great effort for one mine.
We produce in Cornwall the finest mining engineers, who go all over the world, and the finest mining machinery. We should do everything we can, apart from employment and other reasons, to make it possible for the tin mining and other natural sources of wealth in West Cornwall to be developed.
There is also the important new industry of uranium, and any expansion of mining would help in that regard. I hope the Chancellor will bear those facts in mind and consider whether something could not be done to develop those natural resources on a steadily progressive scale in peace time, so that in the event of such emergencies as I have described we are not caught with the need for sudden vast expansion which can be avoided if we take steps now.
§ Mr. Hayman
There is a link for all three new Clauses because they are seeking to get exemption from taxation which, in the case of Midlothian, will allow an industry already existing to continue. I come from Cornwall and represent what used to be known as the mining division of Cornwall. I know only too well what it means when an industry of this kind is almost under sentence of death. For long years the Cornish miner had to emigrate to all parts of the world, whether he liked it or not, because the industry was neglected by the nation. I do not want to detain the Committee for long in referring to that.
I want forcibly to emphasise what was said by my hon. Friends the Members for Midlothian (Mr. Pryde) and West Lothian (Mr. J. Taylor) in support of their new Clause. The hon. Member for St. Ives (Mr. G. R. Howard) referred to Carn Brea, which is in my constituency and a mile from my home. The Westwood report referred to it as a highly mineralised area. Reference has been 1391 made to copper which was once mined in Cornwall. In my constituency, there is an area which has been described by Hamilton Jenkin in his book "The Cornish Miner" as the richest square mile in the old world. I suppose that we shall never mine copper in Cornwall again, but those who know say that reserves of tin exist, and I certainly should not dispute that assertion.
I would also remind the Committee that my own area of Cornwall was the cradle of the industrial age in Britain two centuries ago. There are the famous names of James Watt, who lived and worked in my constituency for many years; Richard Trevethick, the pioneer of the railways; Humphrey Davy, from the St. Ives Division, who patented the miners' safety lamp; William Murdoch, who first lit a house with gas in Britain, and William Bickford, from my constituency, who invented the miners' safety fuse. These are examples of what has come from Cornwall as the result of the exploitation of its mineral resources, in which it was, and may still be, very rich.
Fifty years ago, 10,000 people were employed in the tin mining industry in Cornwall. Today there are fewer than 1,000. The mineralised zone of Cornwall is 10 miles wide, running from the Lands End district right up to the Gunnislake district, in east Cornwall. Nobody knows what may lie below, in the granite rock. It will be difficult to exploit it.
This age will probably be known as the age of metals. We are consuming metals at a prodigious rate in the world today, and, as has already been said in this debate, the known resources of some metals, including tin, are very limited. It seems to me, therefore, that something should be done to see that the potential resources of metals in Cornwall are exploited. I do not mind how they are exploited. If they exist, and private enterprise is not prepared to exploit them, then the State should do so. I am a Socialist, and the fact that the State may have to undertake this job does not frighten me in the least.
§ Mr. D. Marshall
In 1946, the then Chancellor of the Exchequer answered that argument by saying that the Gov- 1392 ernment had come to the decision that they were not prepared to do so.
§ Mr. Hayman
What happened ten years ago is no criterion of what may happen in future. I am expressing my own opinion as a Socialist, and saying that the fact that the State may have to undertake the job does not frighten me. If there is any justification for the exploitation of these minerals, the money which will be spent on it will come out of our national resources, whether paid by the State or by private enterprise.
Our School of Mines in Camborne is sending trained mining engineers all over the world. I suggest that this is a very valuable invisible asset, because allied with our School of Mines is the mining machinery industry, which employs 2,000 workers. Of their products, 80 per cent. is exported to mining camps overseas. This is extremely important for my constituency and for the whole of Cornwall. I therefore have much pleasure in supporting all three Clauses.
§ Mr. Geoffrey Wilson (Truro)
I do not wish to prolong the debate. Owing to an engagement elsewhere, I was not fortunate enough to hear the speech of my hon. Friend the Member for Bodmin (Mr. D. Marshall), but I want to put on record the fact that I support him and that I add my name to the proposed new Clause moved by him. I have taken a great interest in the development of nonferrous metals in Cornwall. No development is going on at present, but I am satisfied that the proposals of this Clause would assist in such development, which must be to the benefit not only of the county but the nation.
The hon. Member for Falmouth and Camborne (Mr. Hayman) has referred to the fact that he represents the mining division of Cornwall. That is so, but the boundaries of the old mining division were not quite the same as they are now, and part of that division is now in my constituency. Therefore, it is right that I should put on record the fact that I am also taking an interest in this matter.
§ Mr. Wilson
I hope that the Clause, if accepted, will be to the benefit of Cornish mining. It certainly would be to the benefit of the country if these mineral resources were developed.
§ 11.45 p.m.
§ Mr. Thomas Oswald (Edinburgh, Central)
I have no desire to detain the Committee unduly as the hour is late and I know that the Chancellor must be very tired. I have watched him with his eyes closed this evening, and I have no doubt that he is thinking of what has been said by hon. Members on both sides of the Committee about these three Clauses so closely knit one to the other.
I support my hon. Friends the Members for West Lothian (Mr. J. Taylor) and Midlothian (Mr. Pryde) in what they have said about this acute problem in the Scottish shale oil industry. I talk with some knowledge of the matter, because it was my privilege to negotiate the wages of the men employed on the refining side of the industry with Scottish Oils Limited at the Grangemouth establishment.
The Chancellor and his colleagues are continually asking the people of this country for increased productivity in order to get the nation out of the economic difficulty in which it finds itself at the moment. Therefore, it seems morally wrong, when we have huge deposits in the shale field in Scotland, that this great industry should be allowed to die.
We have all the plant, all the knowledge and all the manpower necessary. All that we have to struggle for at the moment, as far as Scottish shale oil is concerned, is the exemption of shale oil from the Excise Duty on hydro-carbon oils.
In recent years there has been a tremendous development in the use of diesel oil engines for the propulsion of commercial and passenger vehicles. We produce that oil in Scotland and yet we have a redundancy problem which is adding very considerably to the unemployment figures in Scotland. I hope that the Chancellor will appreciate that of the thirteen regions into which the country is divided as far as unemployment figures are concerned, in Scotland we have over 57,000 people unemployed. We are likely to add many more thousands to that number unless some exemption from this duty is given to hydro-carbon oils produced in the Scottish region.
As has been pointed out, the Scottish oil industry was a pioneer industry which has been developed all over the world. It is tragic in the extreme to see it disappearing when that could so easily be saved. No capital investment is required 1394 in this industry. All the machinery exists at the moment; it is only a question of having to face up to the overburdening tax on the industry. That is the reason why the industry is at present in the doldrums.
I appeal to the Chancellor to look very closely at the submissions made from both sides of the Committee on behalf of the clay industry and of the shale oil industry for some alleviation of the problems which they are facing and for the employment of more people in those industries.
§ The Economic Secretary to the Treasury (Sir Edward Boyle)
We have certainly had a varied debate, and I think that this is the first time that it has fallen to me to reply in the same debate to two Inland Revenue Clauses on mining and one Customs and Excise Clause on shale oil. When I think of the varied debate we have had and the number of places we have visited, I am reminded of a discussion I once heard between two learned theologians as to whether the 39 Articles, the four lions at the base of Nelson's Column and the four cardinal virtues added up to 47 somethings. I do not propose to be drawn into discussing Socialism in general or the nationalisation of industry in particular.
First of all, on this subject of metalliferous mines, the new Clause which my hon. Friend the Member for Bodmin (Mr. D. Marshall) moved in such a very able speech proposes that exemption from Income Tax Schedule D and Profits Tax should be given in respect of the first 36 months' profits of a trade, set up after 5th April of this year, which consists in the working of a non-ferrous metalliferous mine. From the wording of the Clause, I gather that my hon. Friend's intention is to limit the exemption to mines within the United Kingdom though, of course, there is nothing in the Clause itself which would explicitly exclude overseas mines operated by concerns liable to United Kingdom taxation.
§ Mr. D. Marshall
I think that my hon. Friend must be reading from the wrong Clause. The Clause tabled by my hon. Friends and myself states:…a non-ferrous metalliferous mine within the United Kingdom….
§ Sir E. Boyle
I had overlooked that, and I apologise to my hon. Friend.
1395 I think that it is, perhaps, a good idea if, first of all, we see what is the present tax position regarding mining companies. The picture is that a mining concern is allowed to deduct, in computing taxable profits, all expenditure of a revenue nature which it incurs in extracting minerals, and is granted allowances, on capital expenditure spent on finding and developing mineral resources and on plant, machinery and works acquired for that purpose. Furthermore, it is worth remembering that the initial allowance is given on mining works at the exceptionally favourable rate of 40 per cent.
My hon. Friend did refer several times to past debates. He referred to the debate in 1946. He might also have said that both he and I took part in a debate on this subject in 1951, and it is worth mentioning that since then, when my right hon. Friend the Lord Privy Seal restored the initial allowance in 1953, he gave a specially favourable investment allowance to mining concerns of 40 per cent.—for which I think the whole House was grateful—and, now that the investment allowance is suspended, we are back to a 40 per cent. initial allowance for mining concerns.
My hon. Friend referred to this question of mining taxation in the Budget speech. The whole question of the tax treatment of mining concerns was reviewed by the Royal Commission on the Taxation of Profits and Income. I would just say that my right hon. Friend is considering the proposals which the Royal Commission made, although in this case there are certainly a number of difficulties. But I must say to the Committee that, if any further tax relief is to be given to mining concerns, there are real objections to those tax reliefs taking the form proposed in the new Clause, and I should like to put those objections.
Relief of this kind would mean that non-ferrous metalliferous mining concerns would be given preferential treatment, not only as compared with other kinds of mines, but as compared with industry generally, and if a tax-free holiday were conceded to certain mining concerns, it would be extremely difficult to resist similar claims for preferential treatment for other mines, and for other sections of industry. For example, the 1396 shipping or agricultural industry might perfectly well claim that its particular importance to the national economy, or the degree of risk involved in its enterprises, entitled it to preferential treatment. [HON. MEMBERS: "No."] Certainly, claims of that nature would be made.
We will certainly consider the problems of the mining industry, but my hon. Friend must honestly agree that the fact that the mining industry does enjoy a 40 per cent. initial allowance—which is much bigger than most industries enjoy—does show that the special problems of that industry have been noted by the Government and we do realise its difficulties. I cannot say more than that this evening, except that, as I say, we will certainly look at this, and my right hon. Friend is still considering the recommendations of the Royal Commission on this subject.
I pass to shale oil, which is a subject familiar to many of my colleagues and on which several deputations have been received at one time or another, and to which a good deal of attention has, of course, been given. Here I think I can only summarise the objections to what hon. Gentlemen opposite are proposing. I am afraid that they will have heard them on a number of occasions, and they must forgive me if tonight I have to play a rather old tune, but I cannot do more than simply go over what the difficulties are.
The acceptance of this proposal would entail a direct cost of about £1 million a year, and it might entail an indirect cost running into several millions of pounds a year. The indirect cost might well prove to be considerable, and I do assure hon. Members that the matter has been very carefully considered recently by Departments and by Ministers.
The position is that the indigenous oil industry gets some preferential assistance —amounting to about £1,250,000 a year —and additional relief might have embarrassing repercussions which would surely be unwise in the absence of any very compelling reasons for the giving of additional relief in order to prolong the life of this industry which has no prospect of becoming self-supporting. There seems no prospect of it becoming self-supporting in the future. If the industry were geared to rely on the assistance of the full amount of the present Customs duty, the same level of assistance could 1397 not be maintained without, in effect, granting the company a direct subsidy if Customs were reduced in the future.
So far as the unemployment situation is concerned, hon. Members will know that this has been carefully examined by the Scottish Office and by the Ministry of Labour. All I can say tonight is that there is no immediate unemployment problem in West Lothian. Workers will be. it is hoped, absorbed in existing or new industries; but, as hon. Members will agree, this is not the easiest area in the country.
§ Sir E. Boyle
We realise that there is a problem here, and the Scottish Office and the Ministry of Labour, as I have said, will do their best to meet it, but for the reasons which I have given. I must ask the Committee not to accept the new Clause.
§ Sir Ian Fraser (Morecambe and Lonsdale)
I should like to ask just one question. The Chancellor is here and has heard this debate and must have been impressed with the fact that the Economic Secretary did not really know what he was talking about. Nobody is a greater admirer of the Economic Secretary than I. and I know how overworked financial Ministers are; but the hon. Gentleman has really not done more than read a brief. Cannot the Chancellor himself look at this again?
Right hon. and hon. Members may wonder why I, from the north of England, should intervene; but the fact is that, in business, my family have been purchasers of tin from Cornwall for the last 150 years. It is running out now, and we do not get so much; but it would be an enormous source of strength to Britain if these deposits about which we have talked tonight could be properly exploited. This could be done without any cost to the Chancellor. What a godsend it would be to him to be able further to help our country without any cost; to get something for nothing.
§ Mr. H. Macmillan
I thought that that hon. Gentleman was not altogether generous to the Economic Secretary who. I think, is the greatest strength any 1398 Chancellor could have to support him. He faced the rather difficult task of having to answer a debate on two subjects, dissimilar in character, and I have seldom heard a discussion of the principles of Income Tax at the same time as discussion about the Excise.
I can only say that the benefits given to mining— initial allowances, and others —have put the industry to special advantage. The special concession suggested by these Clauses, however much our sympathy may be for this work in Cornwall and elsewhere, seems quite contrary to the whole principle of our taxation system.
I must ask the Committee to think; seriously before we start applying to other and developing industries a principle which is quite contrary to all our; tradition. Whatever might be the best means of assisting these industries, I do not think it would be right for the Committee to use a method so unusual and With such possible dangerous repercussions.
I will, of course, gladly give the assurance to all my hon. Friends, who I know are very interested, that we will consider whether further assistance of any kind 'can be given towards the exploitation of these mineral resources if it is right and wise to do so, but I honestly feel, and I; think that those who study our taxation system would agree, that the method suggested is not one that would stand up to the pressure which might be put upon it.
Question put and negatived.
§ Mr. H. Macmillan
I beg to move, That the Chairman do report Progress and ask leave to sit again.
We have dealt with these two new Clauses and, I understand, we are to save: the third for the pleasure of starting Monday with a Division, which is always a good way to begin a day.
Question put and agreed to.
Committee report Progress; to sit again this day.
§ Resolved, That this House do now adjourn.—[Mr. Wills.]
§ Adjourned accordingly at two minutes past Twelve o'clock.