HC Deb 15 June 1959 vol 607 cc137-76

On and after the fifth day of August, nineteen hundred and fifty-nine, 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 oil for use in any mechanically propelled vehicle driven by diesel fuel and licensed as a public service vehicle for the carriage of passengers. —[Mr. McLeavy.]

Brought up, and read the First time.

Mr. Frank McLeavy (Bradford, East)

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

The Temporary Chairman (Mr. F. Blackburn)

I suggest that with this Clause we should discuss the new Clause (Repayment of duty on hydrocarbon oil used by public service vehicles outside built-up areas).

Mr. McLeavy

The purpose of the Clause is to exempt public service vehicles for carriage of passengers from Customs duty, commonly referred to as fuel oil taxation. The Chancellor has received most urgent representations from the industry, but his only response up to date has been a small concession on licence duties. Unfortunately, this concession cannot have any material effect upon the financial difficulties confronting the industry. Only the most direct assistance to prevent this downward trend can prevent the industry from an extremely difficult financial position.

The industry is as firmly on the rocks as the Chancellor of the Exchequer was himself eight days ago, but our difficulties are not due to bad seamanship but to an attack by Treasury pirates. Like the Chancellor's passengers, our passengers in the countryside have to find their way home as best they can. We hope that the Chancellor tonight will bring to our rescue the good old British launch "Fair Play" so that we may refloat and set our sails once again for the wider seas of public service.

I will refer shortly to the history of this tax. Prior to the Budget of 1950, the tax on fuel oil used for road transport purposes was 9d. a gallon. Indeed, throughout the last war no change in taxation was thought desirable, although the need to restrict its use was certainly very pressing. However, after the war by three successive increases in 1950, 1951 and 1952 the tax was increased by 1s. 9d., making the total tax of 2s. 6d. per gallon. This tax represents in artificial costs, something like 2½d. —3d. per vehicle mile, which to an industry accustomed to work to several decimal places in its cost per mile is enormous.

What was the purpose of these increases in the tax upon fuel oil? The Budget statements of both the late Sir Stafford Cripps and the right hon. Gentleman who is now Lord Privy Seal, who were responsible for the major part of these increases, made it clear that the main reasons for them were to restrict consumption and to save dollars and, to some extent, the heavy cost in foreign exchange. So far as I can ascertain from the records, neither the late Sir Stafford Cripps nor the Lord Privy Seal ever suggested at the time that these increases were for the purpose of increased revenue. What the industry cannot understand is why these increases are retained when the real difficulties for which they were imposed have been overcome.

I suggest to the Chancellor that it is not to the credit of Parliament that we should take advantage of emergency measures to impose a permanent financial burden upon industry. If no other reason could be advanced, a sense of honour should impel the Chancellor to remove this tax forthwith.

I want to deal with the unfairness of the tax to passenger road transport. Even if we consider the tax purely from a revenue angle, it represents an unfair discrimination as between general users, particularly in the industrial sector. If this oil is used by stationary machinery in the factory, it is untaxed. If, however, it is used for the purpose of transporting workers or goods to or from the factory, which in itself is also a charge upon the cost of production, it is heavily taxed. Indeed, the more one looks at this tax the more illogical it becomes.

Our bus services are an essential part of our industrial, commercial and social life. The carrying of workers to and from work, whether to the factory, the office or shop, is just as important a part of our industrial needs as the factories themselves. To discriminate between fuel oil used in the factory and that used to get the workers to and from work seems to me to be unreasonable. Even the children going to school or the housewife doing her shopping have a bearing upon the industrial aspect of the problem.

8.45 p.m.

What is our case for the exemption of buses from fuel oil taxation? We say that the tax is an unfair discrimination as between two types of industrial users, that it has become a major factor in the present financial difficulties of the industry and that the cut in unremunerative services and the general curtailment of services in cities, towns, urban and rural areas presents a serious problem which can be relieved only by removing fuel oil taxation.

Traditionally, the bus industry has always run a very high percentage of its services at a loss, the better paying routes paying for the less paying routes. I think that this was appreciated very clearly by the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation when he paid what I thought at the time was a well-deserved tribute to the industry. The Joint Parliamentary Secretary, speaking in the debate on 2nd July last, said that: In the main, these operators were extremely good—and we should record it—in carrying their share, and even more than their share, of unprofitable routes. I suggest to the Chancellor that this tribute by the Joint Parliamentary Secretary was no mean tribute. It was a very fair tribute arising from his experience of the industry and from his connection with the Ministry itself.

I should like to say a few words about the rural services. I have spoken time and again about the rural services, but I want also to combine the position of the rural services with that of the services throughout the whole of the country. It is no secret that over the past six years enormous cuts have been made in our bus services. Those services were reduced by many millions of miles. For instance, the Maidstone and District Motor Services alone cut nearly one million miles of service. Furthermore, not only were hundreds of rural services reduced in frequency but many were abandoned altogether. I suggest again to the Chancellor that if he is to stop this rot he has to do it now in the form of a substantial reduction or the abolition of the fuel oil tax.

The Minister of Transport announced a few weeks ago that he was setting up a committee to examine the rural bus problem. I shall be interested to see what new information it will produce which is not already known to the Minister and the Government generally. The real interest of rural bus services is tied up with the wider national services. They can only be made available if the national passenger transport undertaking has the financial means to cover the services. They can only survive—and I emphasise this—if subsidised either by the State or by the larger bus undertakings.

The suggestion has been made that rural bus services could be maintained by the use of a kind of utility bus. I am rather surprised that the Government are willing to listen to such a stupid idea.

Mr. Ellis Smith

Who suggested that?

Mr. McLeavy

The other side.

The facts are that the buses must be interchangeable between one route and another, and the buses must be available for keeping the services running at weekends and so on. Small buses are no use at peak traffic periods. So the idea behind the small utility bus is all right in theory but is unworkable in practice. No undertaking wants to have a large number of small utility buses clogging up its garages. Everyone knows that on market days and at weekends and during peak traffic periods the small utility bus would be of no use whatsoever. Therefore, it would have to be taken off the routes and replaced by a larger bus. So the utility bus is a very undesirable remedy for the difficulty.

I should like for a moment to deal with the wider issues involved. The difficulty in the bus industry is now a national one. The Chancellor, I hope, will not attempt any longer to assume that it is confined to rural areas. Curtailment of services in the populated areas is causing real hardship to the travelling public. The position in urban and rural districts is growing worse every day.

What is wanted is not merely acceptance of the fact that the problem exists, or sympathetic words from the Chancellor of the Exchequer. We have had them far too long. What is wanted today is a bold approach to this problem, and I suggest that the approach has got to be of such a substantial character that it will enable the bus undertaking to carry out its work.

I understand that it is permissible to discuss with this new Clause the new Clause relating to the repayment of duty on hydrocarbon oil used by buses in rural areas, the new Clause in the name of the hon. Member for Yeovil (Mr. Peyton) and some of his hon. Friends on the Government side. I should like to say a few words about that Clause. I do not believe in any fancy scheme involving complicated bookkeeping and designed to distinguish between the areas of routes covered by the bus services, as suggested by that new Clause. I do not believe that that is a practical solution to the whole question of our bus difficulties.

I am perfectly sure that both the Chancellor and the Government as a whole know that the only remedy for these difficulties is to take away the burdensome tax which becomes such a tremendous amount per car mile.

Mr. Ellis Smith

We must go on hands and knees to obtain remission.

Mr. McLeavy

I think it is unreasonable for the Chancellor and the Government to refuse today to withdraw a tax which was imposed mainly for purposes other than that of revenue. I have appealed time without number for fair play for the bus industry. No one would dispute that there is no other industry that has made so great a financial sacrifice in order to provide a service satisfactory to the general public, whether in the towns, cities, urban areas or rural areas. No industry has been more humbugged by petty-fogging and totally unnecessary taxation than has the bus industry.

I remember very well that during the war, when people with executive jobs in industry who were working for the war effort were receiving inflated wages, bus drivers and conductors and those who had to supervise them had their wages or salaries kept down at the Government's request and had very few increases. Whilst people in many other industries, including those holding administrative posts, were given big salaries, the bus operators were providing these services at a time when the then Government said, "We must not allow the bus fares to rise unduly." The loyalty and devotion to the cause of the war effort of those of us who were engaged in the bus industry has been to our disadvantage during the period of peace. No one has cared two hoots about the sacrifices in wage standards which those in the industry made during the war. No one worries today about the fact that busmen went right down the wage ladder and are still down that ladder today. All that is dead and gone. Those services were rendered, but there has been a very poor reward for the patriotism, loyalty and service which the bus industry gave during the dark days of war.

I ask hon. Members opposite, in fairness to those who are engaged in this industry, whether anyone believes that, apart from the railways, there is any other industry which has to provide a service to the travelling public whether it pays or not. Commercial vehicles run only if there is a profitable load to be taken from one point to another, but passenger bus services must work to a schedule laid down by the Traffic Commissioners. The buses have to provide a certain percentage of unremunerative services. During a large part of the day there is no question of carrying a full load of passengers. The industry's whole financial difficulty arises from the fact that it is a public service and is charged with providing public transport for the community at large. I believe that if the general public realised that the inconvenience they suffer today in the countryside, the cities and the towns, is due to the fact that the passenger transport industry is crippled by heavy, unfair fuel oil taxation, there would be a strong protest throughout the country.

9.0 p.m.

Finally, I make an appeal to the Chancellor of the Exchequer. The industry is entitled to expect from the right hon. Gentleman a frank statement of the position. It is not good enough to say that the Minister of Transport is making an inquiry into the difficulties of the rural services. The whole industry should be included in that inquiry, not one section only. It seems to me to be commonsense to remove the tax and give the passenger transport industry a real chance to do a good job for the travelling public.

Mr. John Peyton (Yeovil)

I am grateful to you, Mr. Blackburn, for your courtesy in allowing us an opportunity of referring to the Clause standing in my name and in the names of my hon. and right hon. Friends—(Repayment of duty on hydrocarbon oil used by public service vehicles outside built-up areas). It has a much more modest but a much more urgent purpose than that of the Clause proposed by the hon. Gentleman the Member for Bradford, East (Mr. McLeavy).

I hope very much that our Clause, despite the circuitous route it adopts to reach the objective of helping the rural services, will commend itself to my right hon. Friend. I am not certain whether he will be aware that the Clause is derived from the 1928 Finance Act, a provision which was concerned mainly with fuel used in fishing boats. I do not wish at this late hour to indulge in any unseemly or personal references to my right hon. Friend's adventures in boats. Nevertheless, I commend our Clause to him. It is one which undoubtedly, in the language of the racecourse, is classically bred. It may be said to be by that well-known staying stallion, "Treasury" out of that consistent mare, "Unintelligibility", a union which my right hon. Friend will be the first to recognise has provided goodly progeny in the past.

The purpose here is to prevent further curtailment in the countryside of essential transport services. I do not believe that it is necessary to argue this case at great length. My right hon. Friend the Chancellor, who himself represents a rural area, is well acquainted with it already. If he does not feel moved to accept the proposed Clause, which is on the Paper for his consideration, I hope that at least he will, to revert to my previous metaphor, himself ride a winner in this direction on the Report stage, because there can be no doubt of the urgency of this matter.

Mr. Ellis Smith

Will the hon. Gentleman forgive me for interrupting? Many of us are listening with great sympathy to the case he is stating, but will he say something about the administrative difficulties?

Mr. Peyton

I am coming to that if the hon. Gentleman will give me a chance.

The effect of this Clause would be to give a rebate of fuel duty to buses for mileage in non-built up areas. This has the advantage of avoiding the difficulty of defining what is and what is not a rural area. Mileage in non-built-up areas is easily ascertainable, which is one great virtue of the new Clause. At the same time, I recognise that if the purposes of the Clause are to be fully implemented there will have to be some consequential regulations by the Commissioners of Customs and Excise. I say quite frankly to the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) that I yielded to the temptation of preserving what clarity there was available and also of taking advantage of brevity, at least at this stage, in the hope that I might tempt my right hon. Friend into taking the kind of action which we desire.

Mr. Ernest Popplewell (Newcastle-upon-Tyne, South)

Would the hon. Member explain a little further his reference to a non-built-up area? On a bus route from town A to a point 15 miles distant, for instance, the bus might pass through three or four villages or similar built-up areas. Would the journey through those villages be deducted from the mileage in non-built-up areas?

Mr. Peyton

All that it is necessary to say at the moment is that the mileage in a non-built-up area along a given route for any vehicle is easily ascertainable. Built-up areas have been clearly defined in the Road Traffic Acts, mainly in the 1934 Act and also in the 1956 Act. I admit that this is a difficulty. On the other hand, it is possible to establish a criterion. I do not know whether this criterion will commend itself to my right hon. Friend.

Mr. Popplewell rose

Mr. Peyton

I think that it would be better if I did not take up time to persuade the hon. Member of the wisdom of this criterion. If he has a better alternative to suggest to me, I shall be glad to listen to it.

Decency demands that one should make some estimate or guess of the cost of a concession which one asks the Chancellor to make. I believe that this concession would cost him between £7 and £8 million a year. The other day, with great wisdom, he made a concession in respect of cinemas. We are asking for a concession for those in the countryside who wish to go to cinemas and who also wish to travel for other purposes. These are people in desperate difficulties, because they are unable to get the transport on which their lives depend.

I suggest that the Clause would be of proportionately greater benefit to the small operator, which is surely what my right hon. Friend wishes to see in these difficult days. I do not think that such a Clause would have the support of the industry, which I am certain would rather adhere to the case which it has made on a number of occasions and which has been made in the House for an all-round reduction in or abolition of duty in respect of all buses. As I said at the beginning, however, we have in mind the fact that there is an urgent need to do something to prevent a further curtailment of these rural services. Whether the Committee which my right hon. Friend recently appointed reaches fruitful conclusions or not, inevitably the issue will come back to my right hon. Friend.

A lady wrote to one of my hon. Friends the other day and put the point graphically, if somewhat amusingly. She wrote, "We have no convenience here and we have to walk six miles to the nearest town." I do not ask my right hon. Friend to be influenced by every one of those words, but I ask him to realise that there are many people living in the countryside today, particularly older people who find the problem of getting about very difficult and painful. I hope that he will find it possible, either now or later in the Bill, to give some concession which will be of valuable and marked assistance to rural transport, which I think has a very strong claim upon his generosity.

Mr. G. A. Pargiter (Southall)

While I congratulate hon. Members opposite on the ingenuity with which they have framed their new Clause, it seems to me a pity that they have weakened the total strength of what might be adduced in favour of our Clause by advancing a proposal which seems to me impossible to operate and which I have no doubt the Chancellor will shoot down in flames.

We know that the Chancellor will tell us how difficult it would be to operate even the suggestion which we make in respect of all road passenger vehicles. He will tell us that he has every sympathy with the proposal, because we have heard from many Chancellors how sympathetic they are about these things, but when it comes to a question of action it is surprising how much ingenuity their Department can show in putting forward what, as a matter of policy, it has already been decided to do.

If the Chancellor is sympathetic towards this proposal and intends to do something about transport services, he could surely find ways and means by which the amount of fuel used for road passenger services could be carefully calculated and returns made in such a way that the rebate could be paid properly and fairly for this purpose only. I should like him to tell us exactly how much decline in revenue there has been over the last few years from fuel oil duty on passenger service vehicles. It is masked all the time by the increased revenue from petrol and fuel oil used in commercial vehicles other than passenger vehicles.

The Chancellor has no need to worry on the score of falling revenue. If he will consider what he is getting in revenue from passenger services and deal with that matter alone, he will appreciate that the law of diminishing returns has been operating for some time in the sphere of passenger transport services. Further, if he would consider the fact that an increase in total passenger services could provide adequate services both in country and town, he might find that the loss of revenue, which he would deprecate to begin with, would be recovered to a considerable extent, if not entirely. Does a small loss really matter, if we are getting in return a more efficient service at a lower cost than at present? Bus operators are saying that they are between the upper and nether millstones. If they increase their fares less people travel, but if they do not they have to run at a loss, and if they take off some of the buses it means a still greater depreciation of revenues, very often without corresponding savings.

The case for the Clause is unanswerable. It has been made in past years, but, as the years go by, it becomes ever more urgent. It is not one of those pet ideas which do not really matter; it is a problem of real urgency. Every time the Chancellor dodges the issue the position becomes worse and the travelling public suffers increasingly. It is an unfair burden, which ought not to be borne.

The Clause could contribute considerably to a reduction in the cost of living. One of the vital items of most people's expenditure is the cost of travelling to and from work. If something could be done to reduce that cost and to provide adequate passenger services it would benefit both industry and the public and, ultimately, it would mean only a very small loss to the Exchequer. For all those reasons it is time for the Chancellor to be a little more forthcoming than he and his predecessors have been in the past.

9.15 p.m.

Mr. G. Wilson

I oppose the new Clause and commend instead the Clause—(Repayment of duty on hydrocarbon oil used by public service vehicles outside built-up areas)—which my hon. Friend the Member for Yeovil (Mr. Peyton) has already mentioned. I do so because hon. Members on this side of the Committee think that this is a good Finance Bill and, much as many of us would like to see the abolition of or a substantial reduction in the duty on fuel oil, commonly known as Derv, to make any such sweeping change would destroy the whole pattern of the Bill.

The Clause to which my hon. Friend has referred, however, is a much more limited and practical one, which could be accepted. I would draw the attention of the Committee to the history of the provision upon which the Clause is modelled. It arises from a Clause inserted in the 1928 Finance Bill by the right hon. Member for Woodford (Sir W. Churchill), who was then Chancellor of the Exchequer, in reply to a plea from the then Member for North Cornwall—Commander Wiljiams—who asked for special consideration for fishermen.

In the Finance Bill a large concession had been made in connection with derating, and in order to find the revenue for it a tax of fourpence was put upon fuel. Exemptions were originally provided in respect of farm tractors and fishermen but, when the duty on kerosene was withdrawn—it was thought not right to tax fuel used by the poorest section of the community—the concession to the fishermen was dropped. On Report, however, Commander Williams persuaded the then Chancellor to reinsert the concession in respect of fishermen. The wording of the Clause to which my hon. Friend has already referred is only slightly amended to meet the present situation in respect of public service vehicles.

In the 1928 Finance Bill it was pointed out that only a small amount of fuel was used by fishermen but that the concession was important for them because they were in a bad financial position.

That is the position of the rural buses at present. We believe that the Clause would be preferable to the one which has been moved, which does not specifically help the rural buses but helps everybody. In addition, it is limited to Derv, whereas the later Clause includes petrol, so that it would help the minority of buses running on petrol, which are mostly in rural areas.

Far from its being a precedent, as I have explained, the precedent was set in 1928. Nobody else has used this except in exceptional circumstances which we suggest have now arisen in connection with the rural buses. There is no difficulty in deciding what proportion of a bus route is outside a built-up area. The effect of the Clause would be a substantial concession to those buses which run mostly in rural areas, and there would be a slight concession to those services which were run entirely, or mainly, inside a built-up area.

As was said, the money involved by adopting the Clause we propose would be very much less than if the Clause proposed by the hon. Member for Bradford, East (Mr. McLeavy) were accepted, and for that reason I think it would be reasonable to ask the Committee to press the Chancellor to give some further consideration to the matter.

Mr. R. E. Prentice (East Ham, North)

We all agree that the new Clause on the Order Paper in the names of hon. Gentlemen opposite is one that would cost the Exchequer less than the Clause we propose, but in a year in which tax concessions of many kinds have been made, road transport as a whole should have been one of the national priorities. The case for giving relief for road passenger transport is one that is becoming stronger every year. As other hon. Members have pointed out, many arguments have been put to successive Chancellors of the Exchequer, both in this House and by representatives of the industry, over a number of years.

Each year the problem has become more difficult because of the increased number of private motor cars going on the roads and taking passengers away from the industry. Difficulties have also increased because the costs of the industry have been going up. These concessions should not be confined to rural transport. While I agree that there is a strong case for the concession being given to rural transport, many of the services affected are in urban areas.

Many transport undertakings serve urban and rural districts simultaneously. The London Transport Executive has very considerable country services. Its urban services help to finance the rural services and less profitable urban routes. Many rural services would be preserved if the stronger new Clause moved from this side of the Committee were accepted.

The London Transport Executive is a very efficient organisation which gives very good service, but it has been operating for some years under a pattern of changing social habits which have affected the passenger transport industry. The position has been aggravated by the financial policy of the Government. There was a great deal of public protest last year at the number of cuts that were made in transport services. There were protests from borough council representatives, organisations like the trades councils, and many individual people. On taking those complaints up with the London Transport Executive, we were told of the very real difficulties which made the cuts unavoidable.

My hon. Friend the Member for Bradford, East (Mr. McLeavy), who has great experience in the transport industry, referred to one of the difficulties facing transport undertakings. It is the way in which wages and salaries of people employed in passenger transport have declined in relation to those of practically all the rest of the community in the last 20 years. It really is not good enough that the public should expect to get cheap transport at the expense of those who are employed in the transport services. We were reminded of this very drastically last year at the time of the London bus strike. Higher fares have had to be imposed from time to time. There is a limit to the extent to which they will be effective, but they have had a serious effect upon people living in constituencies like mine who have to do a lot of travelling to their place of work. The problem in the rural areas is worse still. It is not good enough for the Government to shuffle off this responsibility on to another special committee.

The Government can help by accepting either of these proposals, preferably that advanced by hon. Members on this side of the Committee. If the position in the rural areas is allowed to go on declining at the present rate, we shall be heading for a situation in which there will be few bus services at all in the purely rural areas. What shall we say to the people who live there? Will they be told that they must have a car in order to get about? People generalise too much about the increased use of cars. Millions of people will never own motor cars, either because they cannot afford one, or because they cannot drive or because they are unwilling to drive, or for reasons of that kind. We cannot aggravate the depopulation of the countryside by failing to provide proper road transport services in the country areas.

I anticipate that the Committee will be told that it is not the financial policy which causes these difficulties, but that they are occasioned by the increased number of motor cars, by the change in social habits because people stay at home to watch television and do not use the public transport services as much as they did previously, or reasons of that kind. But the difficulties have been aggravated by the financial policy. It is a problem of cost, and a fact which I do not think can be avoided by the Government is that were they to make this reduction in taxation for which we ask, some road services would remain in operation which otherwise would have to close down during the next 12 months. I think we have a right to appeal to the Government to change their attitude.

Sir Robert Cary (Manchester, Withington)

This is the fourth occasion on which I have spoken on this subject since my right hon. Friend the Chancellor presented his Budget. I ask his forgiveness, and I promise that I will try not to reiterate some of the things which I have said before.

We had a gentle winter and we are enjoying a fine summer, which one hopes will continue. But assuredly it will be followed by hard and severe winters. To see our rural services wither and fade away in such circumstances when further and drastic cuts have been made in counties like Lincolnshire—

Mr. Harold Davies (Leek)

And Staffordshire.

Sir R. Cary

These cuts are general. The rector for the South Ormsby group of parishes wrote a letter to The Times on this subject. When speaking of severe winters, I am thinking of counties like Kent on the eastern side of the country and of Lincolnshire. Those are areas where the services are withering and may become non-existent.

I am glad to follow the hon. Member for East Ham, North (Mr. Prentice), because in using the word "priorities" the hon. Gentleman touched on the essence of the problem. Surely, the bus fare which is a basic part of the cost of living, is entitled to rank on equal terms with the price of a cinema seat in the matter of concessions.

For these general reasons I appeal to the Chancellor to adopt the method advocated by my hon. Friend the Member for Yeovil (Mr. Peyton), who put the case cogently and clearly. That is a method other than the straight cut advocated by hon. Members opposite. Their method would cost about £30 million, as we were told by the Financial Secretary in a recent debate, but my hon. Friend's suggestion would cost about £7 million to £8 million. That is a possibility, as one of my hon. Friends said, without basically changing the structure of the Budget.

9.30 p.m.

Mr. McLeavy

If we took advantage of the Clause proposed by hon. Members opposite, would the hon. Gentleman advise the Committee that that would meet the whole position?

Sir R. Cary

No, it would not meet the whole of the position. The emphasis in our Clause is placed upon rural services. The hon. Member for Bradford, East (Mr. McLeavy) made his case on the general needs of the industry.

I came down for the Budget debate expecting the 2s. 6d. to be swept away. While it was a most satisfying Budget, and while I am grateful to the Chancellor for what he has done in other directions and still grateful to him for the concession which he made about licences, which cost £6 million, I still feel that there is an urgent public need to be met not over the industry as a whole but in particular on the rural services which will have to go through such a trying time this coming winter.

I was glad that an hon. Member opposite mentioned the motor car versus the bus. The way the position of the motor car is being grossly overstated is fantastic. Thousands of our constituents in rural areas are slogging the lanes with heavy baskets. As to there being a motor car per person, there is not even a motor car per family, and when a family has a motor car it is generally used by one individual. What do we see today, even at weekends? Two-thirds of the cars do not even go out. The car is a happy thing which the head of the family tinkers with while he waits for his Sunday dinner. It is just as well that the cars do not come out. On my main road in Kent this weekend there was a queue extending five miles. No matter what one did, one could not get along that road for two or three hours. It is just as well that today the motor car has taken the place of the cottage piano of fifty years ago with its golden candles. Only occasionally was one allowed to go into the parlour and lift the lid of the piano. Of course, we have candelabra on small grand pianos, but today the motor car, I am afraid, gets preference over all that type of furniture.

The hon. Member for Bradford, East raised the subject of the distribution of fuel. We are talking about Derv. I will not weary the Committee with details from an excellent publication that I have which has been issued by the petroleum industry, but we use in the industry roughly 2 million tons of Derv. Gas, diesel oil and fuel oil, all freed from taxation, are used about nine times as much for electricity generation, gas making, central heating and glass making and by the oil refineries for their own use and, above all, by the railways. All that is free. Yet in the narrow sector about which we are speaking there is a burden of taxation at the 2s. 6d. rate. I suggest that it is still a burden which we ought not to contemplate for much longer if we really want the industry to survive, but I feel that, in particular, my hon. Friend is right in placing the emphasis in his Clause on the rural services.

Mr. Harold Davies

The hon. Gentleman's plea has touched my heart. I live in a rural area, and I agree entirely with the sentiments which have been expressed. Perhaps he would press the Chancellor a little more. The Prime Minister suggested that we may have one day to move 12 million people out into the country districts. Would not the hon. Gentleman suggest that a small donation from the defence fund might help the rural bus services to solve the problem? Therefore, why not go for the £30 million that my hon. Friends and I want?

Sir R. Cary

I am glad the hon. Gentleman has mentioned the subject of defence. Perhaps I may widen out my thoughts a little.

Mr. Davies

I am sorry now that I started the hon. Gentleman off on that subject.

Sir R. Cary

A new Clause, rather like a Bill on Second Reading, has a main theme of intention or virtue which is not particularly concerned with matters of administration or with how the Measure is to be paid for. There are some considerations which are rather wider than the technicalities of the subject, and the Committee ought to consider these aspects.

First, these services have taken years to build and have employed the energies of many firms. For instance, chassis makers like Leylands and body builders like Northern Counties and Metropolitan-Cammell have a deep interest in the survival of these routes. But can it be far from the mind of my right hon. Friend the Minister of Defence that suddenly the mobility in our rural areas might wither when the situation elsewhere is not so happy? But quite apart from the Ministry of Supply, the Ministry of Transport and other Departments which are directly or indirectly concerned with this matter, there are other considerations. I do not wish to see any further withering of our rural services, nor in this fine industry as a whole which has been built up over many years and which, by means of the shop window which it represents, has been responsible for many grand orders in the export trade.

Mr. Tudor Watkins (Brecon and Radnor)

I am glad that we have been able to discuss these two new Clauses, and I shall be glad of a concession in one direction or another. I propose to deal in particular with the Clause in the name of the hon. Member for Yeovil (Mr. Peyton), and I wish to emphasise the importance of a concession being granted to bus services generally. I wish to place greater emphasis, however, on rural bus services.

I was a member of a deputation of the Rural District Councils Association for England and Wales and the Association of Parish Councils. As the vice-president of the former, I met the Parliamentary Secretary to the Ministry of Transport and Civil Aviation and discussed the problem generally. The question of fuel oil tax was not raised as such. The seriousness of the problem and its effect on rural bus services has not yet impressed itself on people in the industrial areas. It is a very important problem, and I hope that at some time the House of Commons will give attention to rural depopulation.

Many constituents often ask, if subsidies can be given to agriculture and other industries, why cannot they be given to rural transport? Last year, in company with others, I met the Financial Secretary to the Treasury and discussed this issue of the fuel oil tax. We were heard sympathetically, but it is now time that something was done. The Chancellor should bear in mind the opinions which have been expressed from both sides of the Committee. There have been reports from Wales stressing the seriousness of this matter.

The task of the traffic commissioners is very difficult today. I certainly should not like to be the traffic commissioner dealing with central Wales at the present time. It is a terrible job to cope with all the problems which arise. The situation is very serious because, when branch lines are closed, although an indication is given at inquiries or meetings of the consultative committees that alternative transport services will be provided, within twelve months there is, in fact, no transport at all. This is the serious side of it, and I ask the Chancellor to pay particular attention to that.

Another important aspect of the problem arises in this way. The small bus operators, and even the large companies such as the Western Welsh Bus Company, have now reached the stage where they are dispensing with conductors and having buses worked by one man. This means redundancy in the country areas, which, in its turn, adds to rural depopulation. One remedy would be to give relief from tax as is suggested by these new Clauses. I would support either in an effort to obtain a concession.

I hope that the Chancellor will, as one hon. Member after another has said, make some definite move to give relief, and not just think in terms of setting up an inquiry. I should not mind a committee of inquiry being appointed if, within its terms of reference, it were possible to suggest some definite means of dealing with this problem of taxation on both petrol and fuel oil and providing a remedy for the transport problems of rural districts today. The situation is indeed very serious. I have heard the excellent arguments which have been adduced from both sides, and I now add my appeal to the Chancellor. On the last occasion I spoke, the right hon. Gentleman followed me and made a concession about Entertainments Duty on cinemas. I am certain that the whole Committee would congratulate him if he were to make another concession this time for the relief of the rural bus operators, and I am happy to support either of the two new Clauses.

Colonel Richard H. Glyn (Dorset, North)

I am glad to have this opportunity of saying how much I agree with a great deal that the hon. Member for Brecon and Radnor (Mr. Watkins) said. I support the new Clause spoken to by my hon. Friend the Member for Yeovil (Mr. Peyton) because I sincerely believe that, while the whole industry is in some difficulty, there is real danger in the situation now facing the bus services in rural areas. In the district in which I live and which I know best, the bus services have contracted very sharply during the last four or five years, and many of them are still not paying. The bus operators are frankly saying that, unless something is done, there will have to be further substantial reductions in services.

Everyone, I know, is grateful to my right hon. Friend for his concession with regard to licences, but that will hardly be enough to save some of the operators who are in the greatest difficulty. Further reductions will have a disastrous effect on the countryside. We must think of the housewife who already has to walk, in some cases, as much as five or six miles to reach the nearest bus stop. This is a serious undertaking for her, particularly if she is old and has to think of getting back on wet evenings carrying her shopping. In the sparsely populated areas of the countryside, such as my constituency, the outlying villages become less and less popular and people leave them just because they have no access to the towns where the big shops are.

For all these reasons, I hope that my right hon. Friend will accept the new Clause of my hon. Friend the Member for Yeovil, or, if it is impossible for him to do that, I hope that he will at least find other means of arriving at the same result. Once rural transport services are abandoned, there seems to be no possible way of restoring them again, and this. I feel, is the most serious factor of all.

9.45 p.m.

Mr. Tom Brown (Ince)

As the debate has gone so far, there seems to be a large measure of agreement. I support the new Clause moved by my hon. Friend the Member for Bradford, East (Mr. McLeavy) from a different point of view, bearing in mind the changing pattern of industry as we see it in northwest Lancashire. Within the last few years there has been a considerable change. It is an inevitable change, because our coal mines in that area are worked out. Men have to travel long distances. When men travel long distances they must pay excessive fares. I am not complaining about the L.U.T., which is represented by the hon. Baronet the Member for Manchester, Withington (Sir R. Cary). The L.U.T. plays its part very well. Occasionally it slips up, but we must excuse it for that.

In my district within the last twenty-five years twenty pits have closed. I have the honour to represent a large coal mining constituency. At present we have only one colliery in commission. In a few months' time that colliery will cease to operate. Three mines have just closed, Garswood Hall, and Maypole. Where are those miners to seek their livelihood? They must travel a distance of seven miles to St. Helens in one direction, Mosley Common in another direction, and Agecroft and Pendleton in another direction. I do not want to carry this argument to any great length, but many of these men who are supposed to be working seven and a half hours a day are away from home twelve and a half hours. They spend five hours travelling morning and night to and from their work.

The Chancellor should give consideration to this Clause from the point of view of the changing pattern of industry in industrial areas. We are finding it very difficult to persuade men to travel when they are offered alternative work in the occupation in which they have been brought up and reared, namely, the pit. They say that it is too far to travel and that the expenses are too great. In some areas the N.C.B. has to come to the rescue; where the bus fare exceeds a certain amount the N.C.B. subsidises the bus fares incurred by the men. The N.C.B. does that because it wants to persuade men to go to new collieries.

At present a large colliery is in the course of being sunk—Parkside. It is the first shaft to be sunk in Lancashire for thirty-five years. It means that the miners have to travel long distances. When they travel long distances, apart from the physical fatigue, they have to pay excessive fares, because there is no other means of transport convenient to convey these men from their homes to the new collieries or the development of some old collieries which is taking place.

I want the Chancellor to focus his mind upon a certain area which is now worked out. The Wigan coalfield is passing out. The Ince and Ashton-in-Makerfield district is passing out from a coal-producing point of view. The N.C.B. is doing its best to find the miners concerned employment, but it can find them employment only in a distant town or a distant coalfield. The Chancellor should examine the Clause from that point of view.

If men and their families are being asked to go elsewhere to earn their livelihood where the occupation in which they have been reared is coming into existence, it is highly desirable that they should be given facilities to do so, by being provided with convenient travelling facilities at a reasonable cost. It is all very well for us in the House of Commons to say that we can find work for the men elsewhere, but if it involves any extra bus fares we will have difficulty. I beg the Chancellor to examine our proposal from that viewpoint.

The National Coal Board and its officials are doing all they can to seek work elsewhere in the industry for the men who have been trained in it. If the Board is prepared to help in this way, surely the Chancellor could give it a fillip by trying to reduce the bus fares to the new development areas.

Some people will say that I am always pleading the cause of the miner, and there may be justification for that.

Mr. Ellis Smith

That is what my hon. Friend is here for.

Mr. Brown

I am here for lots of things. I plead with the Chancellor to help this nationalised industry to find work for its men by making it as easy and as cheap as possible to get to the place where the work is provided for them.

Many arguments could be advanced. Other industries and other industrial workers may be having the same experience. In this one district, however, we now face the issue that our pits are closing down. Our men must seek their livelihood elsewhere and must travel long distances. Only a few days ago, I said to a man, "If you are in such difficulty that you must pay this heavy expenditure, why not seek a residence near the colliery where you will work?" That is a sound argument to advance, but it is another matter to examine the situation confronting such a man.

That man is established in his parochial soil. He has lived there for forty years. He has brought a family into the world and has reared them and now they are working in the district. If he uproots himself and his family, he must pay their travelling expenses back to the place from which he moves. The hon. Baronet the Member for Withington, whom I see in his place, will agree with what I say. Therefore, I ask the Chancellor to review this question from an entirely new point of view.

The contraction of industries within a locality necessitates their employees travelling long distances to work elsewhere and paying excessive fares. It has been said that if the companies operating in these working-class areas can get a concession from the Chancellor in the shape of a reduced tax on fuel oil, they will pass it on to the travelling public. That remains to be seen. We have had those promises before. I feel, however, that the directors of the bus companies have a genuine desire to help those who through no fault of their own must pay excessive fares to and from their work.

I should like briefly to give a picture of a day in the lives of these men. They work seven and a half hours a day underground, but many of them are away from home twelve and a half hours, three to four hours of which is spent in travelling. That gives the Committee some idea of the distances that these men have to travel and of the costs they have to pay. If the Chancellor can help as we suggest, not only will he be doing a service to mining and other industries which, unfortunately, have had to change their areas but he will be rendering a great service to himself and to the Government. Therefore, I plead with him again, as I have done on many other occasions, to give serious consideration to the proposal contained in the new Clause.

Mr. W. F. Deedes (Ashford)

I am sorry to add even a moment or two to this debate at the end of what I know to the Chancellor has been a very long proceeding. Even so, most hon. Members will get home more easily and quickly tonight than some of our rural constituents.

I support the Clause in the name of my hon. Friend the Member for Yeovil (Mr. Peyton) because I think it faces a dilemma which the Treasury has not faced. The dilemma is that if we ask the Chancellor to reduce the tax over the whole field by a sum which will assist rural transport, then we shall be asking him for more money than he will be prepared to give. On the other hand, if we ask him for a smaller sum, it will not be sufficient to assist rural transport. The only answer, whatever administrative criticism may be made of the new Clause, is some sort of discrimination on the lines which my hon. Friend has proposed. I think that there is a degree of urgency about this Clause and this proposal.

A new Clause may have two possible effects. It may at once go to the heart of the Chancellor and attract a favourable response. It may sow a small seed which fructifies during the year and produces a better result in twelve months' time. But twelve months will be too late for the proposition we are now discussing. I think that my right hon. Friend will say that an inquiry is being set up and that it will consider, among other things, the possibilities that my hon. Friend has put forward. That is so, but, when the inquiry is finished, this will go straight back to the Chancellor because he is the only person who can find the final solution of this problem.

I think that this matter has gone on long enough. Over and over again for some months—for some years now—I and other hon. Members on both sides of the House, who represent rural areas have made an earnest and, I think, a rather reasonable plea on behalf of rural transport. I hope that my right hon. Friend tonight will be able to say something more than that an inquiry has been set afoot, and will give our rural constituents some prospect of avoiding, as I can see happening in the very near future, their being cut off as they have never been cut off since the advent of the internal combustion engine.

Mr. Sydney Irving (Dartford)

I support the hon. Member for Ashford (Mr. Deedes) in the sense of urgency which he has endeavoured to project into this discussion. I support the new Clause moved by my hon. Friend the Member for Bradford, East (Mr. McLeavy) because I believe in the interdependence of town and country in the maintenance of transport services. I believe, as my hon. Friend the Member for East Ham, North (Mr. Prentice) has said, that the rural services depend on the profitability of the urban services for their continuance.

I have some sympathy with the hon. Member for Yeovil (Mr. Peyton) because I have a constituency which has a large rural area, the beautiful Darenth Valley. Of all the matters that have concerned my constituents in rural areas over the last four or five years none has agitated them more than the curtailment of bus services. There have been public meetings, parish councils have protested, and there have been petitions and resolutions. Local authorities have pressed the local traffic advisory committee, but all to no avail. Cuts have gone on and there have been a number of withdrawals of bus services. All this has been forced on London Transport because it must cut out unremunerative services. For country people I believe that this deterioration in the services constitutes considerable hardship meaning longer waits, earlier return from town and a general restriction of movement for young and old and I have here letters which show the distress which is caused particularly to old people. It does mean a widening of the gap between town and country which we ought to be trying desperately to bridge.

10.0 p.m.

I welcome, too, the reduction in the vehicle licence duty, but it is not enough. As my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) pointed out in the Budget debate, this constitutes only about one-third of 1d. a mile in a general working expenditure of 2s. per mile and this cannot constitute the difference between profitability and loss; nor can it mean the difference between an unremunerative service and a remunerative one.

We believe that the transport services of the country should be run as a public service, but under the present arrangement the only thing which can save the industry and maintain the rural services is a reduction of this fuel duty. If the Chancellor can find it possible to make any sort of concession tonight he will certainly earn the gratitude of many of my constituents and of many other people throughout the country.

Mr. Ernest Davies (Enfield, East)

If the Chancellor of the Exchequer needed any convincing of the urgency of this problem of rural road passenger transport, I think that he will have been convinced by hon. Members tonight.

Mr. Cyril Osborne (Louth)

On a point of order, Sir Gordon. Does the calling of the hon. Member for Enfield, East (Mr. Ernest Davies) mean a gag on the debate?

The Deputy-Chairman

It means nothing of the sort.

Mr. Davies

This is the Committee stage of the Bill, and I am not attempting to gag the debate, but it was considered that the time had come when the point of view of the Opposition Front Bench should be put forward, and it would help the debate, I am sure, if the Chancellor of the Exchequer gave his views.

The Chancellor has heard from both sides of the Committee what I consider to be the very strong arguments adduced in favour of both the new Clauses. We on this side prefer the one which has been moved by my hon. Friend the Member for Bradford, East (Mr. McLeavy). We consider that its acceptance would have a real effect upon the industry today, and that it would be more practical and more simple in operation than the new Clause in the name of the hon. Member for Yeovil (Mr. Peyton). Administratively it would be simpler. In our view, the new Clause in the name of the hon. Member for Yeovil would constitute considerable difficulty administratively.

The problem of the road passenger transport industry today is a comparatively simple one. It is that the higher operating costs, and the fall in passenger traffic as a result of the resort to private transport and the change in habits, has led to a serious deterioration in the industry which has compelled operators to eliminate a number of their services. Needless to say, those services which are eliminated or whose frequency is reduced are the unremunerative ones, the majority of which are in rural areas. As a result, the whole structure of the industry as envisaged by the licensing system is threatened.

The Act of 1930 provided, in effect, for monopoly powers to be given to the large operators in urban and rural areas, and in return for those monopoly powers they were expected to operate unremunerative services. That system has prevailed until recently, but during recent years the larger companies as well as some of the smaller ones have been compelled to eliminate those unremunerative services in order that they can maintain their profits and dividends. Unfortunately, the road passenger transport industry is still largely operated by companies, and a very large section of the industry is still in private enterprise, which has to operate at a profit. It has to maintain profits and dividends, and it resorts to these reductions in services and the elimination of the unremunerative routes. The Maidstone and District Motor Services, mentioned by my hon. Friend the Member for Bradford, East, cut out 1 million vehicle miles in the last twelve months. The company did that and was able to maintain its dividend.

All I mention this for is to show that the companies in the industry as organised at present have no alternative but to carry on in the way they are; but the great danger is that the element of public service on which the road passenger transport industry has been built, particularly since the licensing system was introduced, is being threatened today, and that the continuation of the industry on public service lines is coming rapidly to an end.

I think that the Chancellor will also have been convinced by speeches made in previous debates on the Bill and by what has been said today from both sides of the Committee, particularly by his hon. Friends who, no doubt, will have made a bigger impression on him than we on this side of the Committee have made. I am sure that he must have been convinced of the failure of the concession which he made—welcome though it was to the industry—to have any real effect in bringing about an improvement. Already some companies have had to raise their fares. They held them at a certain level before the Budget in the hope that relief would be forthcoming. Having seen that the relief is inadequate, they have been compelled to increase their fares further.

We on this side of the Committee prefer our new Clause to that suggested by hon. Members opposite. We doubt whether it is administratively possible to put theirs into operation, and whether it is possible to differentiate between vehicle miles run through urban areas and those run through rural areas. As so many of the routes run through both, if relief were given on that basis one could not be sure that it was going where it was most needed.

We prefer our own new Clause also because the industry's problem is not confined to the rural areas. As was pointed out by some of my hon. Friends, there is a problem also in the urban areas, for very much the same reason—the resort to private transport. Cuts in services have been experienced in London, and a very large number of municipalities are in difficulty in maintaining their bus services at their previous levels and in continuing to give the service that is required. Unfortunately, therefore, this problem is not confined to rural areas. Relief must be given to the industry as a whole if the public service element is to be retained.

Previously, when we moved a similar new Clause, two arguments were advanced against it. The first was that it introduced discrimination and could not be operated administratively. That argument was debunked by the speech of the Paymaster-General when we discussed a Clause in the Bill which makes a small concession on Excise licences. The right hon. Gentleman then made it clear that in the imposition of tax it was quite easy and practicable to discriminate between diesel oil and petrol, and it was being done already. As has been pointed out, roughly 87 per cent. of the diesel fuel oil consumed today is exempt from tax. To exempt a further 13 per cent. would not introduce administrative difficulty. If 87 per cent. is exempt today without a black market developing, surely all diesel fuel used in these public service vehicles should be exempt. It would bring relief to the industry, because some 84 per cent. of the buses operate on diesel oil today. There has been a steady growth in the diesel vehicles and a diminution in the petrol-driven vehicles, and that process is continuing.

The main argument which the Chancellor will advance will be that this cannot be afforded because it would cost £30 million. He has made other large concessions in this Budget but, apart from that, I would point out that recently the Minister of Transport informed the House that on his estimate there will be 12½ million vehicles operating on our roads within ten years. This means that there will be a great increase in the amount of tax the Chancellor will derive from both derv and petrol, and with the steady increase in the number of vehicles—half a million a year—his tax revenue from this source is bound to increase substantially. That will give the right hon. Gentleman an opportunity of making some concession. If he cannot go the whole way as regards diesel for public service vehicles, he could go some way towards it, anticipating the great increase in tax revenue which will accrue to him over the coming years.

So I ask the Chancellor to take seriously the arguments which have been advanced tonight from both sides of the Committee. There are millions of people who must travel to work, or must travel for other purposes, by public transport daily. Those are the people who cannot afford, or for other reasons do not have, private transport of their own. It is those people who are being deprived to some extent today of the service they require. It is true that the business man in a sense is subsidised to the extent that he has a car and his business expenses in part pay for the cost of his travel to and from work. Those using public transport can get no such relief, and they are the ones who need it most. So I ask the Chancellor to take into account the arguments which have been put forward tonight, to realise that this is a real and urgent problem, and that some further action other than that which he has taken already is needed.

Mr. Amory

I agree with the hon. Gentleman the Member for Enfield, East (Mr. Ernest Davies) that serious arguments have been put forward in the debate this evening. It is a serious subject and, therefore, I do not want to dismiss those arguments in the least lightheartedly.

First, I want to make clear the limits of the problem with which we are dealing. The Hydrocarbon Oil Duty applies to all light oil, that is to say petrol, whatever the purpose for which it has been used. It applies only to heavy oils, including diesel, when those oils seriously displace, that is to say compete, with petrol, and that means on the roads. Right hon. and hon. Gentlemen opposite have sought a relief for all buses in the Clause they have put forward. My hon. Friends have sought to isolate rural services in an ingenious way, but one which is open to various objections in practice, I am afraid. I have said on earlier occasions that it would be difficult to make a fuel concession specifically for rural buses. The Government recognise the problem and have been concerned about it for some time. That is why my right hon. Friend the Minister of Transport is to set up a committee to inquire into the whole problem, and I trust that some practical solutions will emerge from that inquiry.

When we speak of the Hydrocarbon Oil Duty we may be tempted sometimes to think in terms of private motoring, but of the £355 million which I hope to get from this duty, the private car pleasure use will amount to not more than one-fifth, even if half the petrol consumed in cars is taken as being for pleasure rather than for business motoring. One has to bear that fact in mind when considering the effects of giving way to requests for discriminatory treatment in this or that case.

10.15 p.m.

There are a number of good cases for discrimination if only it were possible to consider them in isolation or if we had no need to be seriously concerned about what happened to the hydrocarbon oil duty as a whole. The first question is whether special exceptions are in principle acceptable. As long as we make no exceptions, the integrity of the duty and its yield of £355 million is not jeopardised, and that has been the policy ever since the inception of the duty thirty-one years ago, but once we started making exceptions the climate would change completely and the pressures, which are strong enough as it is, would become very hard to resist. This is not just theory. The Motor Spirit Duty which preceded the oil duty, as I think I mentioned previously in our discussions, collapsed and was repealed in 1921 simply because exceptions to it made it no longer viable.

Mr. G. Wilson

Will my right hon. Friend bear in mind that in 1928 an exception was made in the rebate on the light Hydrocarbon Oil Duty for fishermen and that this was the precedent for the new Clause put down by my hon. Friends?

Mr. Amory

It is true that an exception was made in respect of fishing boats and lifeboats, but these exceptions did not affect road transport. What I am saying is that once we start making exceptions which apply to road transport we begin to get into very great difficulties.

In 1928 the then Chancellor of the Exchequer, the right hon. Member for Woodford (Sir W. Churchill), replied to a Question with both the old and new duty in mind. He said: I am well aware that the old petrol tax of 6d. was ruined as a fiscal instrument by the introduction of an enormous variety of exceptions of this kind and that kind, each exception leading to another, and many of them leading to evasion and leakage in connection with the tax."—[OFFICIAL REPORT, 1st May, 1928; Vol. 216, c. 1517.] In Committee on the Finance Bill he subsequently said: So far as this duty is concerned, we are like people in a diving bell; we cannot afford to open a single chink, otherwise the water will rush in and we shall be drowned".—[OFFICAL REPORT, 25th June 1928; Vol. 219, c. 161.] That was true then, and in substance I think it is still true. Exceptions would be very dangerous indeed if the duty is to be maintained, for apart from the encouragement which every other claim would derive, there is a potential chain reaction. If diesel oil for buses at a cost of £26½ million a year, why not petrol for buses? And if petrol or diesel for buses, then why not for road transport of all kinds in the outlying areas? Next, why should we burden road transport or business transport or industry or agriculture, which also affect, however remotely or uncertainly, the cost of living? It is difficult to deny the logic or indeed the social and economic force of such arguments.

Mr. Julian Snow (Lichfield and Tam-worth)

In an endeavour to help the right hon. Gentleman in the difficulty in which he finds himself, may I ask him to address himself to the question of the present serious over-production of oil in the world, which I think is running at the rate of 100 million tons a year and as a result of which certain oil exporting countries are having to find new markets? All of this should demonstrate that the world oil price should be dropped. Is the right hon. Gentleman satisfied that the Government are doing their best to extract oil at the best price in the world market in an endeavour to reduce our running costs in this country?

Mr. Amory

The point which is relevant to our discussion is that oil is imported into this country and that an unlimited extension of its use would not be entirely free from difficulty to our economy.

Mention has been made of the exception of lifeboats, and I have already referred to that. The effect on the cost of living has been mentioned, but that would depend on how far any reduction in the duty was passed on in the form of lower charges and not better services.

So much for the objections in principle, but there would also be very weighty administrative difficulties, particularly under the Clause put forward by my hon. Friends concerning rural transport. We must remind ourselves that the main reason for the shortage of rural services is not the impact of the oil duty but the lack of use of those services. I do not dispute that an exemption from tax would undoubtedly help in that direction, but it would not in itself be a basic solution to the problem and we should be deceiving ourselves if we thought that it would.

My hon. Friends have put forward an ingenious definition which I agree is precise, but I do not think that it would work because if we adopted built-up areas as a definition we should create a number of extreme anomalies. One or two hon. Members have referred to some of them. Many villages are built-up areas and in the parts of many towns and the environs of many towns there are stretches of road with no speed limit. The mileages would either have to be calculated as a proportion of mileage on a very arbitrary basis or on such a detailed basis of individual journeys and individual vehicles, that it would make control very difficult indeed. As my hon. Friend the Member for Yeovil (Mr. Peyton) mentioned, the industry itself has not smiled on a differentiation of the kind which has been suggested.

I am afraid the truth is that if we consider a particular case in isolation it is always possible to devise some administrative means—perhaps disproportionally expensive in time, and not entirely satisfactory—to give effect to it, but the administrative difficulties acquire force if one exemption leads to another, and that is the thing that worries me more than anything else about these Clauses. The administration of the duty would break down under the cumulative weight of burdensome and yet too easily evaded controls. In this case I have come to the reluctant conclusion that the administrative difficulties reinforce the arguments of principle that I have mentioned, and that once exceptions are made it will be almost impossibly difficult to draw the line.

Apart from the cost of the Clause, which, on top of the very big reliefs already afforded under the Bill, would be so great as to be quite unacceptable, that is the reason why—

Mr. Harold Davies

I can see the Chancellor's difficulty, but on the question of cost, is it not possible, as suggested by hon. Members on both sides of the Committee, for some discussion to take place between him and the Minister of Defence, whereby we could spend £30 million less on defence in order to carry out the real work of defence, namely, the movement of people? How can we expect to move 12 million people without rural transport?

Mr. Amory

My brief answer is that I have 101 good uses for anything that I may get out of my right hon. Friend the Minister of Defence.

For the reasons I have given, realising all too clearly the problem which exists, particularly in the rural areas—whose case my hon. Friends have argued with such moderation this evening—I must say that I cannot see a solution by way of either of the proposals put forward. Although I share the anxieties expressed by hon. Members and agree that we must somehow find a solution to the problem, I must advise the Committee not to accept the new Clause.

Mr. Cyril Osborne (Louth)

I have sat here all the evening, and this is the first time that I have sought to speak. I apologise to the Committee for speaking so late in the debate, but I have received a deputation from my constituents asking me to make a point which has not yet been made, and I feel that it is my duty to do so. Despite what any hon. Member may say, I intend to do so.

I want my right hon. Friend to consider the problem of the rural buses through the eyes of a Minister of Agriculture, which office he formerly held. Tonight he has considered the problem purely as a Chancellor of the Exchequer, but what would he have said when he was Minister of Agriculture and wanted the maximum amount of food produced

at home? People in my constituency have seen one branch line of the railways closed down; they are seeing all the small railway stations closed, and the slow trains taken away. It is, therefore, almost impossible for the women in the scattered villages to get into the market towns, because the road services are also being taken away. The women are very reasonably saying that if the authorities will not provide transport for them to go into the towns at least once a week, they are not prepared to stay in isolated villages and allow their menfolk to grow the food we need.

The Chancellor said that his right hon. Friend the Minister of Transport would set up a committee to investigate the problem, and that he trusted that some practical solution would be found. The only solution to be found is the one that he will find, because it is a question of money. He must either make it easier and cheaper for the buses to run in rural areas or he must subsidise them.

Will he consider the matter as he would have done before he became Chancellor, and remember that the amount of money being asked for by either Clause under discussion, and which would give rural buses a chance of providing the services which are required, at least in a large county like Lincolnshire, would be as nothing to the money that he would have to find to import food that we could grow ourselves?

Finally, will he ask his officials to refer to The Times and read a letter written a few weeks ago by an Anglican priest from my constituency pleading the case of his parishioners who were cut off because the bus services were taken away? I know that the problem is difficult, but I beg him to do something quickly: otherwise, in his former existence as Minister of Agriculture he will deeply regret the fact that he is refusing to act as Chancellor of the Exchequer.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 169, Noes 208.

Division No. 135.] AYES [10.30 p.m.
Albu, A. H. Balfour, A. Bonham Carter, Mark
Allaun, Frank (Salford, E.) Bence, C. R. (Dunbartonshire, E.) Bottomley, Rt. Hon. A. G.
Awbery, S. S. Benn, Hn. Wedgwood (Bristol, S.E.) Bowden, H. W. (Leicester, S.W.)
Bacon, Miss Alice Benson, Sir George Bowen, E. R. (Cardigan)
Baird, J. Beswick, Frank Bowles, F. G.
Boyd, T. C. Howell, Charles (Perry Barr) Popplewell, E.
Braddock, Mrs. Elizabeth Hoy, J. H. Prentice, R. E.
Brockway, A. F. Hughes, Cledwyn (Anglesey) Price, J. T. (Westhoughton)
Brown, Thomas (Ince) Hughes, Emrys (S. Ayrshire) Price, Philips (Gloucestershire, W.)
Butler, Mrs. Joyce (Wood Green) Hughes, Hector (Aberdeen, N.) Probert, A. R.
Callaghan, L. J. Hunter, A. E. Pursey, Cmdr. H.
Castle, Mrs. B. A. Hynd, H. (Accrington) Rankin, John
Champion, A. J. Hynd, J. B. (Attercliffe) Redhead, E. C.
Cliffe, Michael Irvine, A. J. (Edge Hill) Reynolds, G. W.
Coldrick, W. Irving, Sydney (Dartford) Roberts, Albert (Normanton)
Collick, P. H. (Birkenhead) Janner, B. Roberts, Goronwy (Caernarvon)
Corbet, Mrs. Freda Jay, Bt. Hon. D. P. T. Rogers, George (Kensington, N.)
Cronin, J. D. Johnson, James (Rugby) Ross, William
Darling, George (Hillsborough) Johnston, Douglas (Paisley) Short, E.W.
Davies, Rt. Hn. Clement (Montgomery) Jones, Rt. Hon. A. Creech (Wakefield) Skeffington, A. M.
Davies, Ernest (Enfield, E.) Jones, David (The Hartlepool) Slater, Mrs. H. (Stoke, N.)
Davies, Harold (Leek) Jones, Elwyn (W. Ham, S.) Smith, Ellis (Stoke, S)
Davies, Stephen (Merthyr) Jones, J. Idwal (Wrexham) Snow, J. W.
Deer, G. Jones, T. W. (Merloneth) Sorensen, R, W.
Diamond, John Lawson, G. M. Soskice, Rt. Hon. Sir Frank
Dodds, N. N. Lee, Frederick (Newton) Sparks, J. A.
Dugdale, Rt. Hn. John (W. Brmwoh) Lever, Leslie (Ardwick) Spriggs, Leslie
Ede, Rt. Hon. J. C. Lindgren, G. S. Stewart, Michael (Fulham)
Edelman, M. Logan, D. G. Stones, W. (Consett)
Edwards, Robert (Bilston) Mabon, Dr. J. Dickson Strachey, Rt. Hon. J.
Edwards, W. J. (Stepney) McCann, J. Summerskill, Rt. Hon. E.
Evans, Albert (Islington, S.W.) MacDermot, Niall Sylvester, G. O.
Fitch, A. E. (Wigan) McInnes, J. Taylor, Bernard (Mansfield)
Fletcher, Eric McLeavy, Frank Thomson, George (Dundee, E.)
Foot, D. M. Mallalieu, E. L. (Brigg) Thornton, E.
Forman, J. C. Mason, Roy Tomney, F.
Fraser, Thomas (Hamllton) Mayhew, C. P. Ungoed-Thomas, Sir Lynn
Gaitskell, Rt. Hon. H. T. N. Mendelson, J. J. Usborne, H. C.
Greenwood, Anthony Mitchison, G. R. Wade, D. W.
Grenfell, Rt. Hon. D. R. Moody, A. S. Warbey, W. M.
Grey, C. F. Morris, Percy (Swansea, W.) Watkins, T. E.
Griffiths, David (Rother Valley) Moss, R. Weitzman, D.
Griffiths, Rt. Hon. James (Llanelly) Moyle, A. Wells, Percy (Faversham)
Griffiths, William (Exchange) Noel-Baker, Francis (Swindon) Wells, William (Walsall, N.)
Grimond, J. Noel-Baker, Rt. Hon. P. (Derby, S.) White, Mrs. Eirene (E. Flint)
Hall, Rt. Hn. Glenvil (Colne Valley) Oliver, G. H. Willey, Frederick
Hamilton, W, W. Oram, A. E. Williams, Rev. Llywelyn (Ab'tillery)
Hannan, W. Oswald, T. Williams, W. R. (Openshaw)
Hayman, F. H. Owen. W. J.
Healey, Denis Padley, W. E. Willis, Eustace (Edinburgh, E.)
Herbison, Miss M. Palmer, A. M. F. Wilson, Rt. Hon. Harold (Huyton)
Hewitson, Capt. M. Pannell, Charles (Leeds, W.) Winterbottom, Richard
Hilton, A. V. Pargiter, G. A. Woodburn, Rt. Hon. A.
Holman, P. Parker, J. Woof, R. E.
Holmes, Horace Pearson, A. Yates, V. (Ladywood)
Holt, A. F. Pentland, N.
Houghton, Douglas Plummer, Sir Leslie TELLERS FOR THE AYES:
Mr. Simmons and Mr. Wilkins
Agnew Sir Peter Bryan, P. Fisher, Nigel
Aitken, W. T. Bullus, Wing Commander E. E. Gammans, Lady
Amory, Rt. Hn. Heathcoat (Tiverton) Burden, F. F. A. Garner-Evans, E. H.
Arbuthnot, John Cary, Sir Robert George, J. C. (Pollok)
Armstrong, C. W. Clarke, Brig. Terence (Portsmth, W.) Gibson-Watt, D.
Ashton, H. Cole, Norman Glover, D.
Atkins, H. E. Conant, Maj. Sir Roger Glyn, Col. Richard H.
Baldock, Lt.-Cmdr. J. M. Cooke, Robert Godber, J. B.
Baldwin, Sir Archer Cooper-Key, E. M. Goodhart, Philip
Balniel, Lord Cordeaux, Lt.-Col. J. K. Gough, C. F. H.
Barber, Anthony Corfield, F. V. Gower, H. R.
Barlow, Sir John Courtney, Cdr. Anthony Graham, Sir Fergus
Barter, John Craddock, Beresford (Spelthorne) Grant, Rt. Hon. W. (Woodside)
Batsford, Brian Crosthwaite-Eyre, Col. O. E. Green, A.
Baxter, Sir Beverley Crowder, Petre (Ruislip—Northwood) Gresham Cooke, R.
Bell, Philip (Bolton, E.) Cunningham, Knox Grimston, Sir Robert (Westbury)
Bennett, F. M. (Torquay) Currie, G. B. H. Hall, John (Wy combe)
Bidgood, J. C. Dance, J. C. G. Harris, Frederic (Croydon, N.W.)
Bingham, R. M. D' A vigdor-Goldsmid, Sir Henry Harris, Reader (Heston)
Birch, Rt. Hon. Nigel Deedes, W. F. Harrison, A. B. C. (Maldon)
Bishop, F. P. de Ferranti, Basil Harrison, Col. J. H. (Eye)
Black, Sir Cyril Donaldson, Cmdr. C. E. McA. Harvey, John (Walthamstow, E.)
Body, R. F. Doughty, C. J. A. Hay, John
Bossom, Sir Alfred du Cann, E. D. L. Heald, Rt. Hon. Sir Lionel
Boyd-Carpenter, Rt. Hon. J. A. Duncan, Sir James Heath, Rt. Hon. E. R. G.
Boyle, Sir Edward Eden, J. B. (Bournemouth, West) Henderson-Stewart, Sir James
Braithwaite, Sir Albert (Harrow, W.) Elliott, R. W.(Ne'castleupon Tyne, N.) Hesketh, R. F.
Brewis, John Errington, Sir Erio Hill, Mrs. E. (Wythenshawe)
Bromley-Davenport, Lt.-Col. W. H. Erroll, F. J. Holland-Martin, C. J.
Browne, J. Nixon (Craigton) Finlay, Graeme Hope, Lord John
Hornby, R. P. Maydon, Lt.-Comdr. S. L. C. Ropner, Col. sir Leonard
Hornsby-Smith, Miss M. P. Medlicott, Sir Frank Scott-Miller, Cmdr. R.
Horobin, Sir Ian Morrison, John (Salisbury) Sharples, R. C.
Howard, John (Test) Mott-Radclyffe, Sir Charles Shepherd, William
Hughes-Young, M. H. C. Nabarro, G. D. N. Simon, J. E. S. (Middlesbrough, W.)
Hunt, Sir Anthony Nairn, D. L. S. Smithers, Peter (Winchester)
Hutchison Michael Clark (E'b'gh, S.) Neave, Airey Stevens, Geoffrey
Hyde, Montgomery Nicholson, Sir Godfrey (Farnham) Steward, Harold (Stockport, S.)
Hylton-Foster, Rt. Hon. Sir Harry Nicolson, N. (B'n'm'th, E. & Chr'ch) Stoddart-Scott, Col. Sir Malcolm
Iremonger, T. L. Noble, Comdr. Rt. Hon. Allan Storey, S.
Irvine, Bryant Godman (Rye) Noble, Michael (Argyll) Studholme, Sir Henry
Jenkins, Robert (Dulwich) Nugent, Richard Taylor, Sir Charles (Eastbourne)
Jennings, J. C. (Burton) Ormsby-Gore, Rt. Hon. W. D. Taylor, William (Bradford, N.)
Johnson, Dr. Donald (Carlisle) Orr, Capt. L. P. S. Teeling, W.
Johnson, Eric (Blackley) Orr-Ewing, C. Ian (Hendon, N.) Temple, John M.
Kaberry, D. Osborne, C. Thompson, Kenneth (Walton)
Keegan, D. Page, R. G. Thompson, R. (Croydon, S.)
Kerr, Sir Hamilton Pannell, N. A. (Kirkdale) Thorneycroft, Rt. Hon. P.
Kimball, M. Partridge, E. Thornton-Kemsley, Sir Colin
Lambton, Viscount Peel, W. J. Tilney, John (Wavertree)
Langford-Holt, J. A. Peyton, J. W. W. Turton, Rt. Hon. R. H.
Leavey, J. A. Pickthorn, Sir Kenneth Vane, W. M. F.
Leburn, W. G. Pike, Miss Mervyn Vaughan-Morgan, J. K.
Legge-Bourke, Maj. E. A. H. Pilkington, Capt. R. A. Vickers, Miss Joan
Legh, Hon. Peter (Petersfield) Pitman, I. J. Vosper, Rt. Hon. D.F.
Lindsay, Martin (Solihull) Pitt, Miss E. M. Wakefield, Edward (Derbyshire, W.)
Lloyd, Maj. Sir Guy (Renfrew, E.) Pott, H. P. Wakefield, Sir Wavell (St.M'lebone)
Loveys, Walter H. Powell, J. Enoch Wall, Patrick
Lucas, Sir Jocelyn (Portsmouth, S.) Price, David (Eastleigh) Ward, Rt. Hon. G. R. (Worcester)
Lucas, P. B. (Brentford & Chiswick) Prior-Palmer, Brig. O. L. Ward, Dame Irene (Tynemouth)
Lucas-Tooth, Sir Hugh Profumo, J. D. Webbe, Sir H.
Macdonald, Sir Peter Ramsden, J. E. Webster, David
McMaster, Stanley Rawlinson, Peter Whitelaw, W. S. I.
Macmillan, Rt. Hn. Harold (Bromley) Redmayne, M. Wills, Sir Gerald (Bridgwater)
Macmillan, Maurice (Halifax) Rees-Davies, W. R. Wilson, Geoffrey (Truro)
Maitland, Hon. Patrick (Lanark) Renton, D. L. M. Wolrige-Gordon, Patrick
Manningham-Buller, Rt. Hn. Sir R. Ridsdale, J. E.
Markham, Major Sir Frank Rippon, A. G. F. TELLERS FOR THE NOES:
Marples, Rt. Hon. A. E. Roberts, Sir Peter (Heeley) Mr. Brooman-White and
Maudling, Rt. Hon. R. Robinson, Sir Roland (Blackpool, S.) Mr. J. E. B. Hill
Mawby, R. L. Roper, Sir Harold