HC Deb 18 March 1957 vol 567 cc41-7
The Paymaster-General (Mr. Reginald Maudling)

With your permission, Sir, and that of the House, I should like to make a statement about petrol rationing.

The Government have reviewed petrol rationing and other restrictions on oil consumption in the light of the latest supply position and have decided that the improved prospects warrant some relaxations.

Supplies of petrol, although increasing, are still likely to remain short of normal demand and it is, therefore, not possible to abolish petrol rationing at once. Nevertheless, the improved supplies are sufficient to allow the basic ration for private cars to be increased by 50 per cent. to 300 miles a month in the next rationing period beginning on 17th April. This will benefit all motorists whether they use the extra mileage for business purposes or for their holidays. In addition, the improved supplies will be taken into account in assessing claims for supplementary allowances and in dealing with applications in respect of passenger and goods vehicles requiring petrol.

Supplies of gas-diesel oil are now sufficient to enable the coupon rationing scheme for Derv fuel and the other cuts on gas-diesel supplies to he brought to an end on 1st April. But stocks in the hands of the oil companies must be built up during the summer to meet next winter's demands and with this end in view the companies have been asked to limit their sales to customers to minimum current needs. It is still necessary for consumers to exercise all possible economies: otherwise, it may become necessary to prescribe a measure of under-delivery by the companies.

Fuel oil supplies are still below normal and stocks must be rebuilt before next winter. Although, therefore, there is no longer any danger of an increase in the present level of cuts, they must remain in force for the time being subject to one minor relaxation in regard to fuel oil for space and water heating where the present cut of 25 per cent. will be reduced to one of 10 per cent. with effect from 1st April.

The additional supplies which have made these relaxations possible have been procured only at higher cost. This will be reflected in price increases to be announced by the oil companies today. In the case of petrol, the increase will be 1d. per gallon on the retail price.

Mr. Robens

While we are all delighted at the increase in the petrol allocation, is the right hon. Gentleman aware that none of us will be very pleased about the latter part of his statement—that there is to be an increase in oil prices and an increase of 1d. a gallon in the retail price of petrol?

On the question of rationing, could the right hon. Gentleman explain why it is that none of the countries on the Continent has petrol rationing at all? Is it not the case that when rationing was imposed there were two increases in price? One was 1s. a gallon duty and the other was an increase of some pence to compensate the distributors for the small amount of petroleum products going through. As there is now to be a 50 per cent. increase in allocation, why is it necessary for an extra 1d. a gallon to be charged by the companies? Further, as there is to be a substantial increase in petrol supplies to be purchased, should not the Government, who promised to take the whole of the 1s. duty off two weeks after rationing came to an end, in this case take 6d. off and reduce the price rather than increase it at this stage?

Mr. Maudling

I do not think that it is quite accurate to say that there is no petrol rationing on the Continent, but in most countries rationing is by price. In some countries the price of petrol is as much as 10s. a gallon. I believe that it is still cheaper in this country than in any other country in Europe.

As far as the present 1d. is concerned, it is true that in the current price there is a surcharge which has arisen because of an increase in the cost of transport and distribution. In effect, the increase of 1d. reflects an increase of 1½d. in the price of the product, less ½d. reduction in the surcharge, which has now taken effect. As for the duty, I think that I should be unwise to anticipate anything that my right hon. Friend the Chancellor of the Exchequer may say at any time on any form of taxation.

Sir J. Hutchison

Can my right hon. Friend say whether what he has just announced is the answer to the applications of people in the Highlands of Scotland and hotel businesses, which have been gravely struck at by the shortage of petrol, or whether he is still trying to find, in addition to the increase in the basic coupons, some other system which would satisfy their demands?

Mr. Maudling

It has been impossible to find any particular scheme which would help the Highlands, in what I agree is a very great difficulty, but the new rationing system will allow altogether 1,200 miles of motoring in the next four months, which should be of great help to all the tourist areas.

Mr. H. Morrison

Is it not a fact that many garage proprietors have been saying for weeks that they have more petrol than they are able to dispose of? In these circumstances, is the right hon. Gentleman quite sure that this labourious business of rationing is worth continuing? Is the right hon. Gentleman also aware that the administration of the scheme has really been shocking, that injustice has been done, that correspondence has been incompetently conducted and applications lost? Is the right hon. Gentleman aware that this has been one of the most shocking pieces of incompetent bureaucracy that we have ever experienced? If this bureaucratic scheme is to continue, will the right hon. Gentleman see that there is some reasonable efficiency about it?

Finally, how does the right hon. Gentleman explain the increase of 1d. per gallon, which, presumably, will go not to the retailer but to other people? Is the right hon. Gentleman asking the House to believe that this increase of 1d. a gallon is really a reduction of ½d. a gallon?

Mr. Maudling

I should like to reject entirely what the right hon. Gentleman says about the way that this scheme has been administered. [HON. MEMBERS: "Oh."] It must be recognised that the staff of the Ministry of Power have had to deal with literally millions of individual applications, on their existing staff with the very small additional recruitment of trained clerical staff that it is possible to get in present conditions. It is quite wrong to criticise the administration of the scheme, which, I think, has been done as well as it could have been in that situation.

As to stocks of petrol, the right hon. Gentleman should not be misled by statements made by individual garage proprietors. The fact is, as I informed the House a week ago, that stocks are below their seasonal normal and that supplies of petrol in the next few months will run substantially below the normal level of demand. Those are facts which we cannot avoid.

Mr. Gresham Cooke

As the petrol ration is now to be increased and as, I understand, gas oil is to be decontrolled altogether, can the right hon. Gentleman say whether the Palace of Westminster will now receive sufficient fuel so that all the hot water taps can be turned on?

Mr. Maudling

I think that that is a question that should be addressed to somebody else.

Mr. J. Griffiths

Does the right hon. Gentleman realise that his explanation of the 1d. increase is completely inadequate? Why has the right hon. Gentleman agreed to it?

Mr. Maudling

It is quite simple. The cost of the product has risen. Gulf prices have risen, and the actual cost of the oil itself has risen by the equivalent of 1½d a gallon. At the same time, the additional distribution costs have fallen by ½d a gallon. Therefore, the net increase is 1d. a gallon.

Mr. Nabarro

While accepting my right hon. Friend's statement about stocks, may I ask whether he will bear in mind that there are now very large numbers of garages in all parts of the country, including one notorious case at Fulham, last Sunday week, which are selling motor spirit without any coupons at all. Will he take proper steps during the remaining period of rationing, to see that the scheme is properly enforced?

Is it not a fact that when the Chancellor of the Exchequer put an additional Is. on the petrol duty he made it abundantly clear that it was an adjunct to the petrol rationing scheme and would end within one month of petrol rationing ending? In those circumstances, surely, as the basic supply of petrol is to be increased there ought to be a commensurate reduction in the duty, amounting to, shall we say, a modest sweetener of 3d. per gallon to the motorist?

Mr. Maudling

I cannot accept for a moment that there is widespread evasion of the restrictions. On the point of taxation, clearly any question about a reduction, or other handling of the tax, must be for my right hon. Friend the Chancellor of the Exchequer.

Mr. H. Wilson

But since the Minister's statement, which we are told was approved by the Cabinet last Thursday, appeared widely in the Press on Friday, before it was given in the House—as happens with all Government statements these days—will he tell us which Minister has leaked on this occasion? Will he ask his right hon. Friend whether he will now hold an inquiry into these quite reprehensible leakages, which occur every time the Government take a decision which is capable of affecting share prices?

Mr. Maudling

I have seen the very wide range of guesses in the newspapers, and in view of the very narrow range of possibilities it is not surprising that some of them should have been right.

Viscount Hinchingbrooke

Can my right hon. Friend say what conditions have to be satisfied before petrol rationing can be abolished? Is it a question of reopening the Suez Canal, or of building stocks up to what they would need to be in normal times? Is the situation envisaged so different from that which obtains today as to justify the continuance of this very complex scheme of rationing?

Mr. Maudling

We cannot abolish petrol rationing until we can be sure that there are adequate supplies to meet the free demand. In present circumstances, with the position of the Canal still uncertain, we cannot say, over the next few months, that there will be enough petrol to meet the demand which would arise and avoid the possibility of our stocks being very heavily run down.

Mr. Hector Hughes

Does the Minister realise that his statement appears to take no account of the special needs of industry and commercial travellers in the far north-east of Scotland, where long distances have to be traversed, and concerning which many Questions have been asked in this House? Will he make some special provision for these special areas?

Mr. Maudling

I recently met a deputation from the commercial travellers and I also said in my statement that the improved supplies will be taken into account in assessing claims for supplementary petrol allowances.

Mr. Gower

As certain increases in bus and other transport charges were granted during the time that rationing was to last, will my right hon. Friend give an assurance to the House that the earliest possible date will be chosen to end rationing?

Mr. Maudling

Certainly. Any Government would be very foolish if they did not end rationing as soon as possible.

Mr. Bevan

As some of the increase in the first instance was supposed to be given to the distributors as they would not be able to maintain the same standard of livelihood because they had less petrol to distribute, what will happen now that they have more to distribute? If we have had an increase of ld. a gallon now that the ration has been increased by 50 per cent., by how much will the price increase when the whole ration is restored?

Mr. Maudling

The right hon. Gentleman is in error in the matter. The increase in the retail cost was not designed to enable proprietors of garages or other distributors to maintain their profits at any particular level, but to enable them to maintain roughly the same profit per gallon sold, which is an entirely different matter. [Interruption.] The right hon. Gentleman should try to understand this matter. I can assure him that it is quite a simple one.

The point is that there is a great difference in getting 1d. profit on 100 gallons and getting 1d. profit on 75 gallons. The point of the surcharge is not to produce the same total level of profit, but to enable distributors to get the same amount of profit, roughly speaking, per unit of the reduced amount that they are handling.

Mr. Nicholson

What is the cost in dollars of the concessions that my right hon. Friend has announced?

Mr. Maudling

I could not give the exact figure without notice.

Mr. Paget

On the question of price, can the Minister tell us why the Government always assume that the oil companies are entitled to be treated on a strict cost-plus basis?

Mr. Maudling

I do not think that that assumption is made, nor do I think that it is true in this case.