HC Deb 26 June 1956 vol 555 cc427-44

On and after the first day of September, nineteen hundred and fifty-six, there shall be allowed from the customs duty a rebate at the rate of two shillings and sixpence a gallon and from the excise duty a rebate at the rate of one shilling and threepence a gallon on the delivery of hydrocarbon oils for use in any mechanically propelled vehicle driven by diesel fuel and licensed as a public service vehicle for the carriage of passengers.—[Mr. Ernest Davies.]

Brought up, and read the First time.

Mr. Ernest Davies (Enfield, East)

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

I do so in the hope of persuading the Financial Secretary to concede the full rebate of the half-crown tax on diesel oil when used in public service buses and coaches. The Clause is confined to them because there has been a steady deterioration in local transport services on account of rising costs.

We have had a number of debates on rural transport, and attention has been drawn to the rising costs, with the consequent higher fares and the dropping of a large number of unremunerative services. The fuel tax is heavy, being 240 per cent. of the cost of the oil. This falls very hard on the public-service vehicle operator, and is a considerable factor in his costs. I understand that it works out at about 10 per cent. per car-mile of the operating costs, which are about 2s. 6d. per car-mile.

Before the war, the loss on unremunerative services worked out at about 1d. or 2d. a mile. Because of increased costs—to which the fuel tax has considerably contributed—including, of course, wages, the loss on unremunerative services, mainly on country services, has risen to 6d. or one shilling per car-mile.

In fact, after the wages bill, the fuel tax—and I emphasise the tax, and not the overall cost of the fuel—is the heaviest item in the cost of operating public service vehicles. We suggest the complete rebate in the case of these vehicles in order to prevent a further rise in fares and certainly to slow down that process even if it should not permit of a reduction.

We suggest that the rebate should be limited to these vehicles, and, of course, we are not so optimistic as to think that an actual reduction of fares could take place because of this Clause; but we do believe that it would lead to a slowing down of the increases which are part of the inflationary spiral which the Government have brought upon the country. This is a reasonable proposition because by limiting the rebate to the type of vehicle for which we plead, the cost, in relation to the large amount raised by fuel taxation, is not high.

I was informed, in answer to a Parliamentary Question, that the cost would be only about £30 million for that type of vehicle; that is, if there was a complete rebate. If the tax was reduced by sixpence, the cost would be only £6 million, so that if the Chancellor would proceed by stages of that kind, the cost to him would be very small.

Delegations have been seen at the Treasury by, I think, the Economic Secretary, who argued that if a rebate was given for road passenger vehicles that very fact would encourage the drift from petrol to diesel-engine buses and coaches, with a consequent loss of taxation on the vehicles converted from petrol to diesel oil motors. But there is no validity in that argument because the figures show that the conversion from petrol to diesel oil has been progressing steadily during recent years. Today, the percentage of diesel driven vehicles, compared with the petrol type, is very high.

In fact, the number of petrol-engine vehicles engaged in road passenger work is only about 23 per cent. of the total number of public service vehicles. That is to say—and this is according to figures given to me in a Parliamentary Answer—of the 74,706 public service vehicles operating, 60,278 were diesel engined, and only 14,428 were petrol engined. So that if the total number of petrol driven vehicles was got rid of and diesel vehicles substituted, the loss of revenue to the Treasury would not be very great. Of course, that is not likely to happen, but the steady rate of conversion appears likely to continue. It seems that there would be a loss of only about £2,250,000 if there was a complete conversion to diesel engines so far as public service vehicles are concerned.

It has also been argued on previous occasions when this matter has been discussed—and I understand that it was an argument used by the Economic Secretary when a deputation visited the Treasury—that it was not fair to discriminate between different users of road transport. It was said that if there was discrimination in favour of road passenger transport the road haulage industry would have grounds for complaint. As it happens, of course, there is no competition between road passenger services and the road haulage industry because they do not overlap, and are quite unrelated. As far as road transport is concerned, the passenger and the goods vehicles are entirely separate and the two kinds of transport operate as distinct industries.

11.30 p.m.

I suggest that neither of the two reasons so far given by the Treasury why this rebate cannot be given, first, because it would encourage the conversion to diesel oil engines and would therefore mean a greater loss to the Treasury, and, secondly, that it would be unfair discrimination, are valid reasons. As a matter of fact there has been discrimination in regard to petrol and diesel fuels in the past. When the petrol tax was first introduced in 1928 by the then Chancellor of the Exchequer the right hon. Member for Woodford (Sir W. Churchill), it was only imposed on light fuels—all diesel and heavy oils were exempted. It was not until 1935 that heavy fuel was taxed. Therefore, such discrimination was presumably, successfully administered over that long period.

Discrimination already exists as between the different users of heavy fuels because the only section of industry which is taxed in respect of diesel fuel is the road transport section. Where diesel oil is used for traction purposes on the railways it is not taxed, and, similarly, it is not taxed where it is used for other purposes unconnected with road transport. Indeed, a very small proportion—only some 15 per cent.—of the diesel oil imported into this country is subject to the 2s. 6d. tax.

In other countries there is discrimination in taxation as between heavy and light fuels, and I find that in every one of the Western European and Commonwealth countries about which I have been able to obtain information there is a heavier tax on petrol than on derv. If it has been found administratively possible for that discrimination to operate in those countries, then surely it can be done in this country.

It has been further argued by the Treasury that a remission of this tax in regard to road passenger vehicles would be inflationary because it would cost the Treasury £30 million and that the money thus lost to it would be put into circulation. I maintain that the contrary would be the case.

The Government are attempting to pursue a policy of standstill on rising prices, but unless some action is taken to relieve the road transport industry of the heavy burdens imposed upon it there will unquestionably be further rises in fares. If this tax were abolished in respect of passenger vehicles it would enable a standstill in fares to be maintained. Certainly the fuel tax has been responsible to a large extent for the increases in fares which have taken place. Up to 1950, when the tax was doubled, there were very few increases, but since 1950 fares have risen on several occasions.

If nothing is done I fear a serious deterioration in services operated not only in rural districts, where they are being reduced in frequency or eliminated altogether, but the frequencies may be changed, particularly at peak hours. According to a great number of operators, that would have to be done because of the high incidence of the tax and other increasing costs. Already municipalities which operate a large number of transport services, particularly in urban areas, are having to draw on the rate funds to meet deficits. I understand that at present half the municipalities are operating services at a loss and having to draw on the rate funds, which is undesirable and should be eliminated if possible.

When the Lord Privy Seal was Chancellor of the Exchequer, he stated, in his television debut during the Election last year: The reduction of taxation on petrol and diesel oil occupies a high priority in my thoughts. Since the Election he has had much else to think about, and recently, no doubt, he has been thinking about Tonbridge. At that date last year at least he did consider that this question of the high taxation of fuel oil was worthy of consideration.

I ask the Financial Secretary, when he replies, to produce some more convincing arguments than have so far been produced by the Treasury to the suggestion which we have frequently made that something should be done to relieve the high costs of public transport services, particularly passenger services. I suggest that there will be further deterioration in the services, if he does not take any action. To reduce or abolish the fuel tax is practical. It would not cost much and certainly it would be the cheapest way in which relief could be brought to the industry—that is to say, at the least cost to the Treasury. I ask the Financial Secretary tonight to give us at least some encouragement that this suggestion will be considered and, if the needs of this section of the transport industry are considered, something will be done to relieve them.

Mr. Frank McLeavy (Bradford, East)

I wish to support the Clause. I think all hon. Members will appreciate that during the period prior to the 1950 Budget transport undertakings throughout the country generally maintained a very reasonable, low level of fares. Despite increased prices on every hand, the transport industry, when the tax was 9d. a gallon on this fuel oil, showed remarkable restraint about fares. Between 1950 and 1952 the tax rose to 2s. 6d. per gallon, which represents an increase of no less than 214 per cent., and also represents from 12 to 16 per cent. of the industry's total operating costs. Taking into consideration the heavy increase in the cost of vehicles and the increases in wages due to the rising cost of living, I think the Committee will clearly understand that the passenger transport industry has been placed in a very difficult financial position.

In Bradford and other Yorkshire cities and towns where municipal undertakings operate, the tax represents a sum of over 3d. per mile, and I am sure that that is a fair average for the rest of the country. It is far too heavy a tax on an industry which has for many long years been making such a fine contribution towards keeping down the cost of transport.

My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) referred to the financial difficulties of the municipal undertakings. It is true that about 50 per cent. of them will be very seriously in debt during the present financial year. There are only two ways to meet that debt—put it on the rates or increase the fares. I submit that it is unreasonable that the transport industry should be so severely penalised when it is trying to maintain a standard of fares which bears no comparison with the present high cost of goods and commodities.

The National Federation of Women's Institutes, which deals with the country life of our people, at a conference in London, passed a resolution protesting to the Minister of Transport against the reduced services in the country districts. Within the last few weeks we have had a very interesting debate here during the course of which hon. Members on both sides made the strongest representations to the Minister of Transport about the serious decline in the rural services because of the lack of finance by the transport industry. It is quite clear that the only remedy for those reduced services in the rural areas is to make it possible for omnibus undertakings to meet the cost of these unremunerative services by reduced taxation.

11.45 p.m.

I entirely agree with the people in the rural areas in thinking that they are entitled to a fair and reasonable system of passenger transport. I know very well that the Traffic Commissioners have been doing all they can to get the various bus undertakings to carry on as many unremunerative services as possible. With the financial position as it is, however, with rising costs, with rising wages, it is physically impossible for many of the bus undertakings to maintain their present unremunerative services in the country areas. The reason why there are complaints from the Federation of Women's Institutes and the countryside generally is that successive Chancellors of the Exchequer have not realised how important it is that the passenger transport industry should be freed from this penal tax.

It is rather difficult to understand why it is that only the passenger and goods transport industry pays the tax at all. The bulk of the production of this type of fuel oil is used in industry, on the farms, and by the railways with their new diesel cars, which, incidentally, are coming into competition with road passenger vehicles. The industry is entitled to some consideration in face of the financial difficulties which confront it.

The aim of the Chancellor is to try to keep down prices. If he is to succeed, he cannot expect the omnibus undertakings to go on losing money, or the municipal undertakings to go on asking the ratepayers to bear their losses. It would be a contribution to keeping down the cost of living if he were to make a substantial concession to road passenger transport, to enable it to maintain a reasonable structure of stage fares. It is vitally important to the well-being of our people that our transport charges and fares should be as reasonable as possible. Hundreds of thousands of our workpeople travel to their work by omnibus, and they will be immediately affected by any further increase in fares, and, if an increase occurs, they will rightly ask for a further increase in wages.

I urge the Chancellor to realise how important it is to come to the aid of the transport industry. I repeat that the transport industry has set a really good example of public service. It has kept fares reasonable; it has applied every possible economy to keep down expenses; but it is faced today with a very serious financial situation. Although I would be the last person in the world to suggest that even if the Clause were accepted that would in itself be the solution to our problems, I suggest that the Chancellor should at least make a contribution towards their solution by this concession to the undertakings which are anxious and are trying to keep down the cost of transport throughout the country. That is worthy of the Government's support. The industry is entitled to this consideration, which would assist the efforts of the Chancellor to keep down the cost of living.

Mr. H. Brooke

One of the facts which, I think, is universally agreed in this somewhat controversial subject is that the duty accounts for not more than ½d. out of a 3d. fare. That, indeed, accords with the figure which the hon. Member for Bradford, East (Mr. McLeavy) gave of approximately 16 per cent. Duty is imposed on derv in order to protect the petrol duty, if I may use the word "protect" in that unpleasant fiscal sense which it has. The duty on hydrocarbon oil last year brought in about £325 million, an extremely valuable item in the Budget revenue of my right hon. Friend. Of that sum about £54 million came from derv.

As I said in answer to a Question by the hon. Member for Enfield, East (Mr. Ernest Davies) some months ago, we calculate that if a Clause of this kind were to become part of the law the loss of revenue would approximate to £30 millon. Hon. Members have pleaded for this Clause on various grounds. One was that it would help to solve the problem of the rural bus services. In fact, as I am sure they are aware, a considerable proportion of the rural bus services are run by petrol-engined buses and not by diesel-engined buses.

If one is seeking to assist rural bus transport, this would be a very expensive way of going about it. I am not arguing that it would be impossible, but the advantage from this concession would accrue in the first instance and directly to the large undertakings with fleets consisting entirely, or almost entirely, of diesel-engined buses and coaches rather than to the smaller operators who are still relying on petrol-engined buses and who might well not have the financial resources with which to re-equip themselves with vehicles that would be able to take advantage of this concession.

Mr. Ernest Davies

I know that the right hon. Gentleman does not want to exaggerate. He is aware, is he not, that nearly 9 per cent. of the mileage of the road passenger vehicles is done on petrol at present? The percentage is very small and as there is a long mileage in the rural areas, I suggest that he is painting rather too gloomy a picture.

Mr. Brooke

There is some difference of opinion, as the hon. Members know, as to exactly how much of the present yield is from petrol-engined buses.

The hon. Member for Enfield, East would not dissent from the main point I am making which is that the petrol-engined buses are to be found largely in the rural areas among the smaller bus undertakings, and they would gain nothing from this Clause. Of course, one of the effects of the Clause would be to provide a strong incentive to any firm which was in a position to change over to do so and get away from petrol. This would stimulate the switch from petrol to diesel vehicles. I am not quite sure how much importance or difficulty the hon. Members see in that.

It strikes me that if the Clause were accepted, it would simply open the way to another concession on which I have, in the past, received strong representations: that is, that all road users should be relieved of duty on derv, the commercial vehicles as well. From that, the next step would be to demand, in the interests of equality, that all commercial vehicles, whether diesel engined or petrol engined, should be relieved; and so the prospective loss of revenue, if one makes any change in the law, is apt to mount up.

The hon. Member would perhaps argue, although some of his hon. Friends in the past have argued to me on opposite lines, that the position could be held at this point, that one could accept the Clause and no more. If he argues like that, however, I think he would find that he gravely underestimates the risk of abuse, for we would increase enormously the amount of diesel oil which, in future, is to be free of duty and we would have these two large classes of road user—passenger vehicles and goods vehicles—one using derv which is dutiable and one using derv which is free of duty.

Earlier today we have had many pleas, to one at least of which I have responded, to reduce to a minimum the amount of bureaucratic control that we must endure. I warn the Committee, however, that if we were to provide this sharp distinction in the duty situation of derv according to whether it goes into a goods vehicle or a passenger vehicle on the road, we should be letting loose for ourselves bureaucratic control on an almost inconceivable scale. That is one consequence, apart from the loss of £30 million of revenue which my right hon. Friend cannot afford, that would flow from the acceptance of the Clause.

If the hon. Member argues that the risk of abuse must be overcome by extending the exemption to derv used in goods vehicles, the £30 million quickly mounts up into a much larger figure, and gradually my right hon. Friend—indeed, any Chancellor, of any party—would see his £325 million from the duties on hydrocarbon oil being filched away. On all those grounds, I must strongly advise the Committee not to accept the Clause.

12 midnight.

Mr. G. H. Oliver (Ilkeston)

I listened with great attention to what the Financial Secretary had to say. I am well aware that this is not a new problem to him. I understand that a deputation saw him earlier in the year and advanced many points which have been advanced here tonight. I was, however, surprised to hear the right hon. Gentleman try to distinguish between the petrol-driven vehicle and the diesel-engined vehicle and say that one was mainly concerned in rural transport and the diesel vehicle on the much larger and busier routes. I have been concerned with road traffic and transport problems for many years, and that was certainly the first time I have heard it suggested that the petrol buses are on the rural routes and the other vehicles are on the more general routes.

Whatever happens, it is quite evident from the record and history of the industry that the petrol engine is on its way out. Only 9 per cent. of the millions of miles run by the public service vehicles are run on petrol engines, and there is no doubt that as years succeed years the petrol engine will disappear altogether.

One of my hon. Friends who has spoken tonight referred to the protests which he had had from Women's Institutes. I can assure him that I have had many protests from my own constituency, from men and women who must travel in the mornings to work, at Nottingham, Derby, the British Celanese, at Spondon, and a host of places which take them far from home. The question of bus fares is a very considerable item in their weekly budget.

I am sure that the operators have done all they can to keep their costs as low as possible. They have introduced a new, lighter bus, which is much more efficient, the one-man bus on rural services, and other improvements, all with the idea of keeping down costs. But they cannot work against the economic tide of the country. Their wages must go up with the trend of wage increases throughout the country. Their maintenance costs, their costs of repairs, and overheads—all those are outside their particular control.

But there is one thing they can do: they can come to this House and draw attention to the fact that the petrol tax amounts to about 3d. a mile—a substantial item in the running costs and the fares which the bus companies have to charge.

Nor could I follow with great conviction what the Financial Secretary said about distinguishing between the passenger service and the road haulage industry. The duty must be transferred to the passengers, because they are carried by the bus. In respect of road haulage and the variety of things carried by the lorries, however, it is impossible to isolate the tax and say how much is being transferred to the many varieties of commodities carried. It filters through, and I have no doubt that if the whole tax were removed from road haulage it would not, and could not, peter through and show itself in the cost of the commodity carried.

A very different story presents itself in respect of passenger transport. Therefore, I was hoping—though my hopes were rather dashed by the Financial Secretary—that if he would not concede the whole of this request he would, at any rate, be prepared tonight to concede some portion of this. This small consumption, which is only a sixth of the consumption of fuel oil in this country, bears this heavy tax of 240 per cent.

The industrial oil, which goes to industry other than motor transport, is free of tax, but when the same oil goes to the road passenger industry and the road traffic industry generally, in the name of derv, a tax of 2s. 6d. a gallon is imposed. That means that five-sixths of the oil used in this country is free of tax. The only portion which is taxed and taxed very severely is that on which the tax is paid by the ordinary working men and women who have to ride about on our highways.

I do not know whether the right hon. Gentleman is prepared to look at the matter again, but I feel that he has not heard the last of it, because this is something which has a vital bearing on a very important service.

Mr. G. A. Pargiter (Southall)

Whenever this case has been argued from the Treasury Bench, the replies have always been much weaker than the case, whether it has been for the limited concession for which we are now asking, or the wider concessions for which we have asked in the past. The level of response to the arguments we put forward is becoming very low. In fact, no real argument has been put forward by the Government.

The right hon. Gentleman talked about petrol buses in rural areas, but those are becoming fewer and fewer almost every week, because in these days nobody buys a petrol bus. The largest vehicle of that kind used in that sort of passenger service is something like the station vehicle and even those are being converted into diesel vehicles, as are ambulances and sitting-case vehicles, and so on. The oil engine, or compression ignition engine, is no longer confined to heavier vehicles.

The number of petrol-engined vehicles of this kind is rapidly shrinking and will continue to shrink. Therefore, the argument that this concession would not help the people whom we want to help, because they use petrol-engined vehicles, is about the weakest argument on this matter ever adduced from the Treasury Bench. The right hon. Gentleman would have some difficulty finding a vehicle larger than a 26-seater which was not a diesel-engined vehicle.

I have been associated with this question for a long time. I remember the start of the oil engine, when we imported the Junkers engine to start this revolutionary means of transport. Every encouragement was given by the Government of the day to this development, which was recognised as being a cheaper and more efficient form of the use of combustible fuel. That should still be the Treasury's aim.

It should not be a case of whether or not we can afford to convert the remaining petrol engines. We should encourage such conversion, because of the great economy which comes from using a diesel engine instead of a petrol engine. With lighter vehicles there is probably nearly twice as much mileage from the compression ignition engine as from the petrol engine, and with larger vehicles the figure would be no less than 50 per cent. and in many cases 75 per cent.

All the arguments favour the compression ignition engine. It cannot be said that the Treasury cannot afford to make the concession, because the concession will have to be made, or inevitably there will be increased fares. The case about losses on rural bus services has already been made. The larger undertakings realise that not all services pay and that some of the good services have to help to pay for the bad. That is generally accepted in the transport industry—especially in the passenger side—but there is a limit to which that can be done.

There comes the limit when there are no services, or prices increase with consequent wage demands. Transport is one of the things which has an important bearing on wage demands. It has an immediate impact upon the worker. He has to pay more fares. Yet the Government can do nothing to prevent this, even in a small way. The Financial Secretary conceded the argument that it meant ½d. upon a 3d. fare, day in and day out, twice or four times a day, and that means a fairly considerable sum in the course of a year. In any case, the figure is hardly deducible, because it will vary according to all sorts of different factors. In some cases it may amount to 1d. upon a 3d. fare, rather than ½d.

I do not know how the Financial Secretary arrives at this figure. I cannot find any means of doing so. In any case, any saving which can be made at this juncture would be a worth-while contribution to the overall economic policy of the Government, and I should have thought that we might have expected something more than we have got.

A still weaker argument is that if this concession were made it would be open to abuse. Let us face the position. The British Transport Commission has in its service an increasing number of diesel-driven railcars. It also has very large fleets of vehicles which use exactly the same fuel as the railcars; in fact, a similar type of engine is used in both vehicles. I take it that any amount of argument which we adduce will have no effect upon the Government Front Bench, so it does not matter whether right hon. Gentlemen opposite listen to me or not. We shall not get very far with them.

I want to deal with this question of abuse. There is very little possibility of that in the case of a rebate of the tax on fuels, because returns have to be made and they can be checked. It is not a difficult operation. The Government cannot pretend that it is, because it is already done in so many other directions that it can be done quite easily in this. The Government are apparently not worried about the Transport Commission, because it uses diesel oil for its road vehicles upon which it has to pay tax, and exactly the same fuel in its railcars, upon which it does not have to pay tax. There will be no difficulty in regard to the limited number of cases where an undertaker has a road transport service as well as a passenger transport service, because separate accounts will have to be kept for the purpose of running the public service vehicles.

The arguments advanced from the Treasury Bench are getting weaker each year. We have now reached the stage where a plain "No" is given, without any proper reason being advanced. That is not good enough, and unless the right hon. Gentlemen change their minds we should do something to make them do so.

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

We are now entering the final stages of this debate and, speaking for the Opposition—and, I am quite certain, for many hon. Members opposite—I must say that the response from the Government upon all the matters which have been raised has been most disappointing; and particularly in connection with this one. A concession was made earlier for a different kind of spirit, and we thought that that was a forerunner of greater success at this stage; but apparently it is not to be.

My hon. Friends who have already joined in the debate upon this matter speak with great authority and knowledge. I cannot speak with the same authority or knowledge, but because I represent the constituency of Rochester and Chatham I am conscious of the fact that at one time we had the dockyard, from which the ships used to go out by sea, and also the flying boat works of Short Brothers, whose aircraft used to fly away, but apart from that we had very little transport of any kind. Since Short Brothers went, however, we have developed a more diversified industry, and I am very much aware of the need to do something to help the industrial organisations which have to use road transport.

Quite recently, I have been supplied with the particulars relating to transport costs in a case which has been drawn to the attention of the Minister, concerning the delays which occur on the by-pass road. I was astonished at the heavy cost of diesel oil used by these industrial organisations in carrying their goods from one place to another.

12.15 a.m.

The Financial Secretary talked about discrimination and abuse. Discrimination is no new thing. It has been practised with regard to fuel generally. Indeed, when the tax was first introduced in 1903, there was discrimination, because so far as passenger and goods traffic was concerned it was charged at half-rate. In 1921 there was no tax at all on this kind of vehicle movement. It was not until 1935 that the same rate was made chargeable. So that discrimination has existed in the past and could easily exist again, without the repercussions which the Financial Secretary fears.

The right hon. Gentleman said that it would be expensive to make the concession, and I cannot disagree with him, but it would not be as expensive as all that. If I understood the figures of the right hon. Gentleman, it would mean that about one-seventh of the revenue would be lost, if this concession was given. My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) said that not all the concession need be given at once. A scheme could be worked out whereby there was a gradual reduction until at last what was wanted in the way of reduced tax could be conceded. If the Lord Privy Seal still adheres to what he said when he was Chancellor, that any tax which exceeds 100 per cent. is not a fair tax, the argument here is more than justified, because here the figure is 250 per cent. I do not think that that could be called fair on any basis.

As a result of my previous Ministerial experience, I am interested in exports, and if a reduction in tax would lead to a change-over from petrol to diesel engines I should regard it as a desirable thing. The diesel engine will develop fast, and if, by a tax reduction, we could concentrate on new designs and improved diesel engines, it would prove a long-term benefit. We should be able to get into overseas markets and what we lost on tax revenue we might gain in foreign currency.

The Financial Secretary also said that a tax rebate would lead to abuse and would need a lot of bureaucratic control. I should have thought that there was a way to overcome that. Surely it is possible to devise a system of rebate on audited certificates of the consumption of this heavy oil.

Finally, there is the point about the cost of living. I am sure hon. Gentlemen opposite would agree that they have been lobbied by their constituents about the high cost of living. High fares are one of the things would send up the cost of living, and we should do something to tackle that question. The Chancellor says that his Budget is designed to stimulate saving. If the workers are not to be allowed to keep some money in their pockets, they will never be able to save. If we are able to reduce fares in this way, we shall be making a contribution towards saving.

Mr. Charles A. Howell (Birmingham, Perry Barr)

There is one point which has not yet been made and I wish to emphasise it. It would appear that every Chan- cellor of the Exchequer, including the present one, has found it difficult, if not impossible, to discover any new source of revenue. It seems that once a tax has been imposed, it is a crime ever to remove it, no matter whether it can be justified or not. I suggest that the Financial Secretary made no effort to justify this tax. He trotted out the usual excuse, which has been advanced time after time, that the Chancellor needs the money. I do not doubt that his right hon. Friend needs it, but it is strange, even tragic, to find that only 12 months ago they threw away £150 million that they had surplus.

We are told tonight that the proposed new Clause cannot be entertained because the Chancellor wants the £30 million. The tax on derv is unfair in relation to other taxes that the right hon. Gentleman has put on. The increase of taxation on derv since the fuel was introduced is out of proportion to other taxes. The Chancellor might well need the money, but I suggest that he should pay more attention to a fair and even distribution of taxes in order to get it. The sum of £30 million may seem large, but it is small in proportion to the Budget, and if it were redistributed back in the industry, it would have a great effect.

At the last General Election the motor industry circulated questions to every candidate asking whether he was in favour of this tax. It would be extremely interesting to know how many hon. Members replied to the circular in favour of removing the taxes on petrol and diesel oil. I hope that hon. Gentlemen who said they were will follow us into the Lobby in support of the proposed new Clause.

Question put and negatived.

First, Second and Third Schedules agreed to.