HC Deb 28 March 1957 vol 567 cc1325-8
26. Mr. Remnant

asked the Chancellor of the Exchequer whether, in view of the increased petrol ration, he will reduce the additional Is. duty proportionately and maintain the yield at the same total.

35. Mr. Cronin

asked the Chancellor of the Exchequer if he will reduce the duty on motor fuel forthwith in view of the now greatly increased quantity available for consumption.

39 Mr. Grey

asked the Chancellor of the Exchequer (1) for what purpose he still retains the increased Is. duty on petrol, aviation fuel, and diesel fuel for road vehicles;

(2) if he will, as a first instalment to the complete abolition of the extra Is. tax put on petrol, aviation fuel, and diesel fuel for road vehicles during the Suez crisis, reduce this increase by 9d. when the increased allocation comes into force;

(3) if he is aware that the new increased allocation of petrol, aviation fuel, and diesel fuel for road vehicles will mean that the consumption will be only 10 per cent, below the pre-rationing period; and if he will give a proportionate reduction in the increased Is. tax that was made to recoup £ 30 million revenue which was estimated to be lost as a result of the amount allocated for the first period forcing consumption down to about 70 per cent, of normal.

42. Mr. Chetwynd

asked the Chancellor of the Exchequer whether, in view of the 50 per cent, increase in the petrol ration, he will now reduce by one-half the additional Is. tax on petrol.

43. Mr. Ernest Davies

asked the Chancellor of the Exchequer whether, in view of the ending of restriction on the use of diesel oil for transport and the increase of 50 per cent, in the petrol ration, he will now remove the 1s. extra tax on hydrocarbon oils.

Mr. Powell

I will, with permission, answer these Questions together.

The temporary increase in duty was designed to offset loss of revenue resulting from the reduced consumption of oil. According to the latest estimate for this financial year, the revenue is unlikely to exceed the 1956 Budget estimate of £ 340 million. As regards the next financial year, I am not in a position to give any undertaking beyond that contained in the Act.

Mr. Remnant

Is my hon. Friend denying that the yield from this duty so far is in excess of the loss of revenue, and is it not correct to say that his right hon. Friend the Chancellor can vary this duty at any time he likes?

Mr. Powell

The yield from this additional duty has not, during the current financial year, exceeded the estimate. The Act under which it was imposed provides a procedure whereby the additional duty may be terminated.

Mr. Davies

Is it not a fact that at present the saving in consumption as a result of petrol rationing is only 3 per cent, whereas the duty has gone up more than one-third? Therefore, the Treasury is making a substantial profit from the increased duty. Further, is it not a fact that bus fares throughout the country have had to be increased owing to the higher duty and, therefore, this is another burden imposed on the travelling public by the maintenance of this unnecessary tax?

Mr. Powell

It may be that at this end of the financial year consumption has run little below the normal level, but the fact remains that the purpose for which this additional duty was imposed, namely, to produce the same revenue as was estimated, will barely be achieved.

Mr. H. Wilson

But is not the hon. Gentleman perhaps unwittingly misleading the House about this? Is it not a fact that the revenue from the petrol duty was already running below estimates before the decision of the Chancellor last December, and that all that has been achieved is that he has restored the shortfall in petrol revenue? Is it not a fact that, compared with the Chancellor's estimate of what he would achieve by this increase, the Treasury is doing very well indeed out of it?

Mr. Powell

No. I can only tell the right hon. Gentleman that the extra yield from this duty since it was imposed has had the effect, as was anticipated at the time, of bringing the total yield for the year almost up to the estimated amount.

Mr. Gower

Will my right hon. Friend consider the psychological advantages of the early removal of this duty and the fillip that it would give to the whole economy?

Mr. Chetwynd

Is not the Chancellor acting against the spirit of the Act in not reducing this duty by a proportionate amount of the increased yield that he expects to get in the next quarter?

Mr. Powell

I do not think that can be said, because the Act does not make it possible to reduce part of the extra duty at all.

Mr. Davies

In view of the complete lack of justification for maintaining this duty, I beg to give notice that I shall raise the matter on the Adjournment.

Mr. Grey

On a point of order, Mr. Speaker. The Minister took the opportunity of asking permission to answer a number of Questions together. Amongst those Questions, three are in my name. I have been trying to catch your eye so that I might put a supplementary. I hope you will let me do so, Sir.

Mr. Speaker

I omitted to notice that the hon. Member was included in the category of Members whose Questions were answered. Mr. Grey.

Mr. Grey

Is the hon. Gentleman aware that there is considerable opinion in the country against the retention of the whole of this Is. duty? Will the Government take note of the fact that when the new allocation takes place the consumption will be only 10 per cent, below the pre-rationing level, and surely on that basis the Treasury could afford to make a proportionate reduction in the 1s. duty?

Mr. Powell

My right hon. Friend has taken note of the view which the hon. Gentleman has expressed, but the change in the ration will still not come into effect for some three weeks hence.