HC Deb 17 April 1961 vol 638 cc818-9

My third proposal for obtaining extra revenue relates to the hydrocarbon oil duty. At present, all light oils, that is mainly petrol, are dutiable at 2s. 6d. per gallon. Heavy oils used as fuel in road vehicles pay the same rate as the petrol they displace; but with minor exceptions, chiefly lubricating oils, which have remained chargeable at 1d. a gallon, all other heavy oils have been free of duty since 1947. The duty on them of 1d. a gallon was then withdrawn, at a time of acute shortage of coal and when every inducement was being offered to get people to change from coal.

The same conditions do not exist today and I consider that for revenue reasons heavy oils should now bear some duty. I propose, therefore, to reinstate the duty, at the rate of 2d. a gallon, on heavy oils at present free of duty, that is fuel oil, gas oil and kerosene. Oils at present chargeable at 1d. a gallon will in future pay 3d. a gallon.

Following the normal practice, duty will be charged on heavy oils delivered from bond. In addition, in order to secure uniform treatment of stocks and, at the same time, to maintain the revenue yield, provision is being made for the appropriate duty to be charged on heavy oils taken out of storage at un-bonded premises and on which the new duty has not been paid. This special arrangement will be applied at premises with a capacity of 200,000 gallons or more and in setting this limit I have in mind that bonding facilities will, in the ordinary course, be granted for such premises on application being made and subject to the usual conditions.

Heavy oils shipped as stores or bunkers in foreign-going ships will, of course, be freed from duty and, following the practice when heavy oils were previously liable to duty, oil used as fuel in coast-wise shipping will also be freed.

The new duty will operate as from six o'clock this evening. I estimate the yield at £48 million in the present financial year and £50 million in a full year.

These are my proposals for raising the £80 million to which I referred earlier. I have not, however, quite finished.

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