§ 22. Sir A. Gomme-Duncan
asked the Chancellor of the Exchequer on what terms American Service men in Great Britain are allowed tax-free petrol.
I would refer my hon. Friend to my reply to the hon. Member for Enfield, East (Mr. Ernest Davies) on 18th March last.
§ Sir A. Gomme-Duncan
Bearing in mind the fact that we all wish American Service men the best possible conditions while they are serving in our country, 211 will my right hon. Friend say whether they are better off in this respect than our own Service men?
They are no better off than Service men in other N.A.T.O. countries. We are following the principle which is adopted generally by other N.A.T.O. countries.
§ Mr. Ernest Davies
Can the Chancellor say what steps are being taken to prevent this petrol getting into wrong hands so that, thereby, others avoid tax? What steps is he taking to prevent the creation of a black market in this petrol? Is he aware that when Amendments to Finance Bills have been suggested in the past to establish tax discrimination in favour of public service vehicles, the argument has been advanced that it was not possible because a black market would be created? How is it that a black market will not be created in this case, but that one would be if petrol were made tax-free for public service vehicles?
There is close supervision between American authorities and our own officials. We are watching the situation very closely, and so far we believe that there is unlikely to be serious abuses.
Mr. H. Wilson
In all seriousness, may I ask the right hon. Gentleman to look again at this matter, which I am sure is causing great concern in all parts of the country? I do not think that the country is satisfied that there should be this tax-free system for petrol. The concession does not apply to Purchase Tax, as we know from a case reported in today's Press. Will he have a look at the whole question again? If the system is to continue, will he, at any rate, explain to the country why it is necessary?
I cannot believe that any hon. Member would wish American Service personnel to be worse off when they are stationed in this country than they would be if they were stationed in other N.A.T.O. countries.
I do not accept that the cases are parallel, but the Question raises issues of Budget policy which I cannot anticipate.
§ Mr. Lewis
While not wanting to stop our American allies from getting this concession, is not it unfair that doctors and others in essential services should be in the position of being taxed, and taxed to a higher degree each time they do more work in the interests of the public, whereas our allies, who are also doing essential work, get away tax-free? The position now is that doctors and midwives are paying a tax to enable our American allies to have this petrol tax-free. Is that fair?
I do not think that there is any connection at all; but, as the Budget is approaching, it would be injudicious of me to answer in detail the hon. Gentleman's supplementary question.
The initiative for this concession came from the American Service Authorities in this country. The annual cost, on the basis of consumption of 8,000,000 gallons of petrol, will be £1 million.
That is a question that I could not possibly answer without anticipating my Budget statement.
§ Sir R. Grimston
Can my right hon. Friend tell me whether British personnel who go to the United States for training in the use of missiles enjoy the same tax-free concessions on petrol?
The tax arrangements on petrol are different in the United States, 213 so the remission would not be exactly similar. In principle, exactly the same concessions are available.