HC Deb 03 July 1961 vol 643 cc1073-95

(1) Profits of a trade commenced after the passing of this Act and consisting of or including the working of a non-ferrous metal mine situated within the United Kingdom, being profits arising from the working of the mine and so arising during a period of thirty-six months beginning with the day on which the mine is first brought into commercial operation, shall be exempt from income tax.

(2) For the purposes of this section a mine shall be deemed to be brought into commercial operation as soon as substantial quantities of ore are extracted from the mine for any treatment and for disposal; and such substantial quantities shall not be taken to include ore extracted in the case of searching for, discovering or testing mineral deposits or winning access thereto.—[Mr. Houghton.]

Brought up, and read the First time.

Mr. Speaker

I think it will be for the convenience of the House also to discuss the new Clause in the name of the hon. Member for Huyton (Mr. Wilson)—"Non-ferrous metal mines in United Kingdom: relief from profits tax"—and the two new Clauses standing in the name of the hon. Member for Bodmin (Mr. Marshall)—"Income tax: non-ferrous metal mines in United Kingdom" and "Profits tax: nonferrous metal mines in United Kingdom."

Mr. Houghton

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

This Clause is in exactly the same terms as that moved by my right hon. Friend the Member for Huyton (Mr. Wilson) in Committee and hon. and right hon. Gentlemen will find the report of the debate in the OFFICIAL REPORT of 21st June, 1961. On that occasion my right hon. Friend the Member for Huyton made a very long and powerful speech. In fact, there was only one longer speech made during the course of the Committee stage, and I look back on that with a certain amount of self reproach.

Sir E. Boyle

The hon. Gentleman is doing a slight injustice to my hon. Friend the Member for Kidderminster (Mr. Nabarro), which I am sure the hon. Gentleman would not wish to do.

Mr. Houghton

If I failed in stating correctly who made the longest speech, then I am sure that the hon. Member for Kidderminster to acquit me of any discourtesy.

I was about to say that the Chancellor, in one of the shortest speeches during the Committee stage, said something about this new Clause which was a distinct encouragement to my right hon. Friend the Member for Huyton and other hon. Members on both sides who were looking to the Chancellor to give sympathetic consideration to the case that had been put to him. Indeed, the Chancellor gave a great deal of encouragement in that short speech. He began by saying: I am not at all unsympathetic to the purposes behind the new Clauses. A little later on he expressed the fear that if he gave a special concession to this industry would he not have to give a similar concession to other extractive industries. In that respect, the Chancellor was merely referring to the well known twin gargoyles that gaze down upon him from the Treasury building—reactions and repercussions—which Chancellors are always conscious and afraid of and can usually turn down many deserving proposals on the ground of reaction elsewhere. The Chancellor continued: I am impressed, however, by the arguments used in this debate. Strong opinions have been expressed on both sides. I can make no promise, but I undertake to look at this again between now and Report to see whether there is any way in which I can help by some further kind of tax concession. Finally, the Chancellor said: There are special circumstances in connection with this commodity at the present time. I do not want to be misunderstood. I cannot make any promise, but I will look at this again between now and Report."—[OFFICIAL REPORT, 21st June, 1961; Vol. 642. c. 1537.] On the strength of that, the Committee did not divide on the proposed new Clause. There was sufficient comfort and assurance in what the Chancellor had said to enable the Committee to leave the matter where it stood in the hope that the Chancellor would have something very favourable to say on this occasion.

The Chancellor will judge of our disappointment that we have searched the Order Paper in vain for the concession for which we were hoping. It is, therefore, necessary to press this matter on the right hon. Gentleman again. What is even more disappointing still is that the right hon. Gentleman is not present himself to give judgment, so to speak, following the hope that he held out during the Committee stage.

I shall not waste the time of the Committee by deploying or repeating the arguments that were advanced on that occasion. They occupied a good deal of the time of the Committee on 21st June, and it seems now as if the needs of the situation will be met if we ask the Government now to say what difficulties they have found in making this concession. Have the reactions and repercussions proved too formidable for the Chancellor to make the special concession that was sought the other week? In view of what the Chancellor said, he must have encountered some very difficult obstacles in the way of making this concession for him to have nothing to propose to the Committee today.

So I am now going to resume my seat because I think my remarks have brought us up to date. All hon. Members know what it is all about and remember when the matter was last raised. We also recall the assurances given by the Chancellor and we await, with interest, the explanation that we shall get as to what is the trouble; why has the Chancellor not been able to come forward with this concession?

Mr. Marshall

In following the hon. Member for Sowerby (Mr. Houghton) I recall that you said, Mr. Speaker, that we should also discuss the two proposed new Clauses standing in the names of my hon. Friends and myself.

As I stated in Committee, the fundamental difference between the Clauses standing in the names of my hon. Friends and myself and those in the names of the right hon. Member for Huyton (Mr. H. Wilson) and his hon. Friends is very slight indeed. If the former are accepted, they will become law in April, and the others would become law in July.

One must come to the conclusion that as no Government new Clauses have been tabled, my right hon. Friend the Chancellor has decided not to accept the suggestion. It is quite inconceivable that the Clause, as now drafted, is so perfect that my right hon. Friend is likely to say that he will accept the Clause as it now appears on the Paper. Consequently one assumes that the Chancellor is not going to accept the Clause. What is he going to say? We can be pretty certain of some things that he will say in excuse. So far as I can remember, they have been repeated for at least the last fifteen years. One of the arguments that he may advance is part of the argument that he used in Committee on 21st June when, according to column 1537 of the OFFICIAL REPORT, he pointed out that there were already a number of concessions for anyone who started to engage in metaliferous mining. He totalled them up and said that as a result there was a form of tax-free holiday for a certain period. He went on to say that he realised that this apparently had not been sufficient. That remark is borne out by the fact that no one has seen fit to take the risk of commencing these operations under the present system of taxation.

He used an argument which the hon. Member for Sowerby, has already suggested might be used on the Government Front Bench today. He said: My difficulty is that if I were to put forward any sort of concession which was held to be a precedent for all extractive industries, then I could not entertain the idea … and then he added these words: … but this is a special case."—[OFFICIAL REPORT, 21st June. 1961; Vol. 642, c. 1537.] It cannot be impossible for the Treasury to find a method of adopting this proposal, for it is incredible that Australia, Canada, Eire and South Africa all manage to have such legislation while it is impossible for the British Treasury to do likewise.

I fear that once again the Treasury has dug its heels in. I fear that the Chancellor has had very little time between the Committee and Report stages to take any stand in the matter, and that, what with the time factor and the argument factor, the only answer we are likely to get tonight is "No" based on the reasons which I have already given. I can only say that I think it is both regrettable and sad. It is regrettable because once again a mistake has been made in the Treasury, and it is sad for a reason which I should think all Members share if they believe what I believe to be true, namely, that it is very likely that there is great wealth still lying under our soil.

6.45 p.m.

It is no good the Financial Secretary arguing that the mines which are now in operation are doing better than usual. This Clause does not deal with mines which are already in operation, so that argument carries no weight. But it is indeed regrettable, in view of our present precarious position, that the wealth should not be disclosed and used to the nation's weal. That would be most regrettable, but it seems likely to be the case. If the Chancellor comes to the conclusion that a concession to this industry will lead to other extractive industries expecting a similar concession and that this is more important than new wealth, I think he is wrong, and I shall have to go against him in the Lobby tonight.

Mr. Geoffrey Wilson (Truro)

I do not wish to repeat all the arguments which were made on the Clause in Committee—arguments which have been repeataed on many occasions in previous years—but I should like to make two observations on the reply that was made to me by my right hon. and learned Friend the Chancellor of the Exchequer, which has already been mentioned by my hon. Friend the Member for Bodmin (Mr. Marshall).

I pointed out in Committee that there were six aspects of Cornish tin mining which were quite distinctive and different from anything else in any other extractive industry. I pointed out that the fact that the tin was not being mined was not due to the supply having run out. It was because cheaper methods of extraction had been discovered elsewhere. I said that, in fact, a shortage of tin in the world was becoming apparent, that the price was consequently high and that we were importing large quantities from other countries so that it would not be a bad thing if we were to import less and produce more of our own. Finally, I said that Cornwall tended to be an area of unemployment. None of those conditions really applies to any other extractive industry.

For my right hon. and learned Friend to say that anything done on behalf of the tin industry might be regarded as a precedent for other industries, therefore, did not seem a proper argument, because, as he himself said, tin is an exceptional case and arguments that might apply to tin could not apply to other cases. Nor am I impressed with the argument which is so often put forward, that there is already a form of tax holiday in respect of non-ferrous metal mining, because the fact is that existing forms of taxation have not helped. If the present system of taxation is regarded as a holiday, it is not doing what the industry wants, because it does not work.

If, on the other hand, it is argued that the proposals in this Clause would not work, I would still say that we should try them, because, as I have pointed out on previous occasions, although the Revenue at present receives nothing from mining development and if the new Clause were accepted it would still receive nothing, in the long run it might be better off. I cannot understand why this proposal has been refused for so long, and I hope that on this occasion we shall make some progress.

Mr. G. R. Howard (St. Ives)

I endorse what has been said by my hon. Friends the Members for Bodmin (Mr. Marshall) and for Truro (Mr. G. Wilson) and by the hon. Member for Sowerby (Mr. Houghton). When we discussed this matter in Committee, I drew attention to the strategic importance of tin. I drew attention also to the importance of the separation of wolfram and tungsten from tin. I shall not detain the House further. For those reasons, if for no other, I very much hope that we shall not receive quite the gloomy reply which seems to be expected.

Sir E. Boyle

I express to the House the apologies of my right hon. and learned Friend the Chancellor that he is not able to reply himself to the debate because of an important meeting which he felt he must attend at six o'clock. He fully realises that his first responsibility, of course, is to the Committee and the House during our consideration of the Finance Bill. I think it can be said—I am sure that this is seen to be true when one considers the records of Chancellors of the Exchequer in this matter—that he has attended a fairly high proportion of all our debates.

I assure the House that my right hon. and learned Friend, in accordance with the promise he gave in Committee on 21st June, has considered very carefully whether there is anything more he could do to help non-ferrous metal mines in this country and the Cornish tin mines in particular. Even if hon. and right hon. Members are unable to agree with my right hon. and learned Friend's conclusion, I assure them that there is no question of his not having devoted time to the subject, as I know from my own experience.

In Committee, the right hon. Member for Huyton (Mr. H. Wilson) put forward a very carefully argued case for some relief. If I may say so, I hope without offence, we know very well the fluency and ability of the right hon. Gentleman throughout all stages of the Finance Bill to make a speech from the Opposition Front Bench without many notes and without very much apparent preparation. On this side, we all noted that, when speaking on this matter in Committee, he spoke from fairly full notes and had obviously devoted more time to the preparation of his remarks than he usually does. The right hon. Gentleman was supported by hon. Members on both sides, in particular by my hon. Friend the Member for Bodmin (Mr. Marshall) who has raised this matter with very great pertinacity on previous occasions ever since he first became a Member of the House in 1945.

In Committee, the case for special treatment was put on two broad grounds: first, that with a world shortage of tin it was only common sense for us to develop to the utmost of our capacity our own resources of tin; second, that, owing to the disposition of the metal in nature and the expense of proving its existence, there was a special case for a special kind of tax relief. The right hon. Member for Huyton claimed no special merit for his own new Clause at that time and invited the Government to put forward their own proposals, if they wished. He said that one possibility might be that the unrecouped losses of operators, both as regards prospecting and the first few years of production, should be carried forward against subsequent profits, making full allowance for exploration and sinking. If the Chancellor cannot accept these proposals, I hope that he will say that he is prepared to look at that as an alternative."—[OFFICIAL REPORT, 21st June, 1961; Vol. 642, c. 1521–2.] At the end of his speech, the right hon. Gentleman advanced the case for a further mineral survey.

My right hon. and learned Friend has looked at the matter very carefully and with a good deal of sympathy. He is in full agreement with the thesis that we should make the fullest practical use of such mineral resources as we possess. However, he feels that it is important, when considering this matter, to comprehend the full extent of the existing tax position. Perhaps the House will forgive me if I go briefly over the ground which my right hon. and learned Friend covered in Committee.

A mining company enjoys a 20 per cent. investment allowance and a 20 per cent. initial allowance in addition, making 40 per cent. in all on all capital expenditure primarily connected with the extraction of ore. As my right hon. and learned Friend pointed out in Committee, if a new tin mine costs £500,000, profits would have to reach about £140,000 for any tax to be paid. Of course, this figure of £140,000 includes a tax-free bonus of £80,000 from the investment allowance. It is, therefore, true to say that mines already enjoy a tax holiday likely in practice to extend for several years.

But this is not the end of it. Capital expenditure on exploration and development, and on mineworkers' dwelling-houses having a useful life coterminous with that of the mine, can be written off over its life. Since 1952, abortive exploration expenditure has been allowed as a trading expense at the time when the search is abandoned. What is more, to deal specifically with the point raised by the hon. Member for Huyton to which I referred, trading losses can be carried forward indefinitely. Furthermore, costs of prospecting, exploration and sinking also can be carried forward indefinitely just like any other trading losses. I say quite frankly to the House that, if my right hon. and learned Friend were to substitute for these existing arrangements a tax holiday for three years only, the mines would on balance be worse off.

When reference is made to other countries which have tax holidays similar to those requested in the new Clauses we are discussing, it is often forgotten that they have not the very generous system of investment and initial allowances to which I have referred. If my hon. Friend the Member for Bodmin will allow me to say so, I have myself supported him in the past as a back bencher on this question of allowances for the mining industry. It is fair to remember that our present system of investment allowances came in for the first time in only 1954, and I believe that, between 1954 and 1956, and again since the investment allowance was restored in 1959, the position regarding capital allowances has been completely transformed and is very much more generous than the provisions which prevail in a good many other countries to which reference has been made.

On reflection, my right hon. and learned Friend has not felt it possible, in the light of the present situation and consistent with his responsibility to see that comparable industries are fairly treated, to improve on these very special allowances affecting tin mining.

Mr. H. Wilson

The hon. Gentleman referred to improving "on these special allowances affecting tin mining". Is he suggesting that these special allowances apply to tin mining only?

Sir E. Boyle

No. I do not wish to mislead the House. I was merely pointing out what seems to me to be, when compared with the position in other countries, the decidedly favourable condition of capital allowances for mining in this country today. I shall not in my speech now traverse the whole range of capital allowances, investment and initial allowances, but I think that the right hon. Gentleman will agree that mining under our present system of capital allowances is treated fairly favourably compared with the great majority of industries in this country.

There are in addition one or two theoretical arguments about a tax holiday which should not be overlooked. A tax holiday benefits a profitable mine but, of course, gives nothing to a mine which is just making both ends meet. Any legislation for a tax holiday, which would, I must say, represent a fairly major depar- ture in our tax arrangements, would have to be both long and complicated. It would have to deal with the treatment of dividends and avoidance devices and the problems of the definition of a new mine, quite apart from the question of pressure from other industries or, indeed from other areas in the United Kingdom.

In our discussion in Committee, reference was made to the Westwood Committee. My right hon. and learned Friend has gone into this matter since we last considered the subject. Its recommendations on the carry-forward of losses have been law since 1952, and so has its implied recommendation on abortive exploration; but in other respects we have gone beyond the conclusions of the Westwood Committee, which were that preferential tax concessions to encourage mineral development and production would not he the correct long-term remedy. Looking back on the recommendations of the Westwood Committee, and the devolpment of our system of capital allowances since that date, I think that we have gone beyond its recommendations.

Mr. E. G. Willis (Edinburgh, East)

The Financial Secretary is forgetting that the most important recommendations of that Committee, of which I happened to be a member, were never put into operation. If they had been, that would have taken the cost of exploration and development completely out of the hands of private people and would have placed responsibility for them on the State.

7.0 p.m.

Sir E. Boyle

I do not think that you, Mr. Speaker, or the House would be too pleased if I enlarged on that matter and gave the pros and cons of that Committee's recommendations. We all remember the hon. Member's distinguished service on the Committee.

My right hon. and learned Friend knew that this matter would be raised again today. He has taken note of the point about a further survey of our resources. I am told that there was a detailed geological survey of Devon and Cornwall in 1956. The view hitherto has been that this 1956 survey gave sufficient indication of the location of the tin lodes and that further work would not be justified. But my right hon. and learned Friend has authorised me to say that he is prepared to reconsider the matter with my noble Friend the Minister for Science.

Mr. F. H. Hayman (Falmouth and Camborne)

Would the Financial Secretary say whether the survey which was carried out was an aerial survey?

Sir E. Boyle

It was not just an aerial survey. It was a detailed geological survey.

As I have said, without making any promises, my right hon. and learned Friend is prepared further to consider the matter. He hopes that the House will believe me when I say that it has been very carefully reconsidered between the two stages of the Bill. He further hopes that the House will accept the validity of the arguments which I have put forward and that, with my explanation, the new Clause will not be pressed to a Division.

Mr. H. Wilson

To describe the Financial Secretary's speech as disappointing would be a grave understatement.

Mr. Hayman

Hear, hear.

Mr. Wilson

I have no complaint about the spirit in which he spoke and the manner in which he put forward his arguments. However, I think that all hon. Members felt that, after the debate we had in Committee, there was no doubt in the mind of the Chancellor of the Exchequer that he had to make a pretty sweeping concession if this problem was to be solved. I think that it is a matter of grave disappointment that the right hon. and learned Gentleman, having clearly left the Committee with a form of words which enabled us to drop our intention of voting against the Government and with the clear intention of doing something, has somehow been pushed off it. All that we have now is the Financial Secretary's negative statement on the problem.

I do not propose to repeat the arguments which were deployed in Committee. I spoke at some length on that occasion. The Financial Secretary was good enough just now to imply that I had done my homework. I claim no credit for this, but no one who heard the speeches from both sides of the Committee could have been left in doubt about the strength of the case that we put forward. Not one hon. Member even attempted to shake our case or to produce an argument against it. Everyone who spoke fully supported it. Nor did the Chancellor of the Exchequer produce an argument to suggest that our case should be rejected. As I say, I thought that he had the clear intention at that time of accepting what we were putting forward. As I say, I do not propose to repeat those arguments. I hope they are still reasonably fresh in the minds of hon. Members.

Mr. Marshall

The Chancellor of the Exchequer said in Committee: I am impressed, however, by the arguments used in this debate."—[OFFICIAL REPORT, 21st June, 1961; Vol. 642, c. 1537.] He was reinforcing what the right hon. Member for Huyton (Mr. H. Wilson) said.

Mr. Wilson

Looking back on that debate, it was clear that the Chancellor and the Financial Secretary came in with the idea of turning down the new Clause. I asked the Financial Secretary if he proposed to speak. He said, "Yes". In the end, the Chancellor got up, obviously to make a different speech. It was clearly the weight of the arguments which were used in the debate which caused the right hon. and learned Gentleman to take that attitude. I do not think there is any doubt about that.

Sir E. Boyle

I think that it was the obvious sincerity felt by hon. Members on both sides on this subject which prompted my right hon. and learned Friend to speak rather than his mistrust of what I should have said if I had spoken.

Mr. Wilson

I was not in the least suggesting that the Chancellor had any mistrust of what the Financial Secretary would say, but when a junior Minister is due to make a speech, as the senior Minister previously agreed—they acted in concert—and after the debate has taken a certain turn so that the Committee feels that there is a very strong case, it is not inappropriate for the Chancellor of the Exchequer to say that he will reconsider it and privately whisper in the ear of the Financial Secretary that he had better tear up his brief. He probably said, "Roll up that brief. It will not be wanted for ten years." However, the Financial Secretary was too fly. He put it in his pocket. He knew that it might be wanted in ten days' time; and therefore we have had it today. The Chancellor of the Exchequer and the Financial Secretary felt that we had produced arguments sufficiently strong to shake the faith which they had reposed in the brief with which they had been armed.

I wish to remind the House that there were two main arguments which, I think, were accepted by everyone as proving the very special and peculiar nature of this case. One was the world tin shortage. It has been said that we have debated this matter in past years. That is true, but I do not think that there has been a time when it has been debated when it was so clear to everyone that we are facing a prolonged problem of shortage of this metal. In the past the arguments have been strong and powerful, but I think that they are much stronger and more powerful today because of the calculation, which should be clear to most hon. Members, that, unless there is a miraculous break in the situation which none of us can forsee, we face a remarkable shortage confined, in the main, to this metal. I do not think that there is another metal about which one can say that there is a likely and continuing shortage.

The House may remember the figures which I gave showing the prospective demand for tin, which is out of all proportion with present consumption, as industrialisation develops, not only in the Soviet Union, but in China. No hon. Member now the Financial Secretary has attempted to rebut the argument about the prospective long-term shortage of tin. I take it that there is no disagreement about this. No doubt, if any hon. Member wishes to disagree, he will seek to catch your eye, Mr. Speaker.

Many of us felt that, although this country's contribution to dealing with the tin shortage could, at best, be only marginal—I have not attempted to overstate this—nevertheless we have a duty, not only to ourselves, but to the world to ensure that whatever tin can be produced is produced. I mentioned in particular the very special danger that, if there were a shortage of tin, some of the tin-producing countries which are now erecting their own smelters in their own countries will tend to ensure that they are well supplied with tin first. If that means no tin for us in this country, that will be a regrettable result. This is something that we must face. Not only shall we be paying higher prices for tin, but we shall have to bring in the finished product for our own smelters, which means a still heavier charge, and, in our view, an unnecessary charge, on our balance of payments. I think that all hon. Members agree that, if we have resources of tin which can be worked economically, then they should be worked. There is no argument about that.

The second main point which I, like other hon. Members, sought to make in Committee concerned the very special mining conditions of tin. Again, I do not propose to repeat the arguments which I used. My hon. Friend the Member for Falmouth and Camborne (Mr. Hayman) indicated the peculiar difficulty of locating lodes of tin, some of them, as he said, very narrow and thin and very hard to find. There can certainly be no suggestion that the geological survey to which the Financial Secretary referred could have located tin for immediate mining. That is fantasy. On this occasion, he must have received his brief from the noble Lord the Minister for Science, because no one could for a moment think that the quite cursory geological investigation in 1956 could have located tin in quantities to be mined. I am sure that every hon. Member who represents a Cornish constituency will agree, with me about that.

There is costly exploration to be done before the tin can be located and before there can be any security about the continuance of the yield from day to day, week to week or month to month. Other minerals are very often insecure and uncertain. In the case of faults in coal mining and with other materials, one may imagine that there is a continuous supply of the material, but suddenly it may be lost because of faulting. Even so, by means of bore holes and other methods, with practically every other mineral one can expect to have an idea of where to mine once the borehole has been done and, apart from the bad accidental fault, to have some degree of security about continued yield. That is not true in the case of tin, however. It cannot be done by bore holes. If the Financial Secretary stands on the 1956 Survey, he must tell us how it was done in relation to tin. Those are the two main reasons: the special mining conditions of tin and the world shortage. So far, I trust, I carry the House with me.

There is one other argument. The Chancellor may argue that he accepts the problem of shortage and the problem of the unique mining characteristics involved, but that there is danger of a precedent being created. At the beginning of my speech in Committee, I accepted the obligation on me and on other hon. Members who spoke of proving that here was a special and unique case. We proved that. The Chancellor admitted—it has been quoted here tonight—that here is a special case. That should have made his task a great deal easier.

I can understand two possible reasons why the Treasury might say "No". One might be revenue considerations. As the Financial Secretary has admitted, however, no cost is involved. It would cost the Chancellor nothing to accept the new Clause. The Treasury, therefore, is not standing on the argument of cost. The only other leg on which the Inland Revenue ever stands if it is not cost is whether a precedent will be created and whether other people will ask for concessions. If the House accepts my argument that in the case of tin we have a unique example, both on grounds of shortage of metal and of mining characteristics, that should give the Chancellor all he needs to stand up to any interests who might say, "You have given it to tin. Why not give it to us?"

The Financial Secretary started by telling us about all the tax advantages that the tin mines already enjoy. They enjoyed the same advantages on 21st June. They obviously were not sufficient then to convince the Chancellor. If he was so sure that those tax advantages provided the answer, he should have been sure on 21st June. I do not complain about the Chancellor's courtesy in looking at the case, but I thought that his offer on 21st June was not merely courtesy but that he was genuinely moved by our arguments and that he intended to do something.

The Financial Secretary went on to say that the tin mines enjoy the investment allowances as well as this, that and the other. Everything that was mentioned by the Financial Secretary applies over a wide range of industry and not simply to tin. The investment allowances were introduced by the Home Secretary in 1954, scrapped by the Prime Minister on 17th February, 1956, and restored by the noble Lord, Lord Amory, in 1959. The investment allowances apply to every industry and it cannot be said that they meet the special case of tin mining. The provisions to which the hon. Gentleman referred relating to underground exploration, the sinking of shafts, and so on, apply throughout mining and not only to tin.

7.15 p.m.

The Financial Secretary fell a little below his high standard when he quoted the Westwood Committee, because, as we were told by my hon. Friend the Member for Edinburgh, East (Mr. Willis), with his special knowledge and his long service on that historic Committee—it was one of the best Committees ever to report—it made the proposal about help for private enterprise in exploration and all the rest against a background that there would be a State mineral resources survey, as I said in the earlier debate.

The Financial Secretary has not provided a convincing reason. He has merely said that the tin mines have certain advantages in some of these directions and they are better now than they were in 1945, 1947 or 1950, but he has not met the arguments put forward in the debate in Committee. The Financial Secretary looked very unhappy about this. He put the best possible face on it, quite unlike the performance of his colleague the Economic Secretary on malt vinegar a few minutes earlier. It would be out of order if I were to go back on that argument, but in both cases the argument was the same. This, however, is a much more important one, as, I am sure, my hon. Friend the Member for Lichfield and Tamworth (Mr. Snow), if he were here, would not disagree. In both cases, the truth is that Treasury Ministers, convinced of the justice of the case, are like putty in the hands of their officials when they come to argue it.

I have never thought of accusing the Chancellor of the Exchequer of lack of courage, He has shown great courage on occasions, sometimes for an entirely wrong and unjust cause. I do not think that many right hon. Members have had to stand up to the Parliamentary rows that he had to face on Suez. Although we felt that the right hon. and learned Gentleman was wrong, nobody felt that he lacked courage in doing it.

The Chancellor has been courageous on a number of other things. He has stood up to the Schedule A lobby in the Conservative Party on the Bill. It would be out of order for me to indicate all the things in which he has shown courage. He does not lack courage in this House. He stands up to the Opposition even when he is completely wrong, as is usual in such cases. He stands up to his own back benchers when he is sometimes wrong and when he is sometimes right. Parliamentarily, the right hon. and learned Gentleman is a tiger, but let him get into a room with a handful of officials and he is a rabbit. That is what happened about malt vinegar, and it has happened in this case, too.

The Financial Secretary has a responsibility to protect the Chancellor. We know that Chancellors are busy people. They attend Cabinet meetings and do things far outside their Department. They have to deal with many important issues. The Chancellor goes round the country making speeches. He has not had a fortnight to prepare the case for the Clause or a similar Clause. The Inland Revenue has had more than a fortnight to prepare its case. It is a formidable organisation, to which I and many others pay tribute on so many occasions. We admire the work, the thoroughness and the knowledge of the Inland Revenue, but it is not always right.

There is a heavy responsibility on junior Ministers in such cases to protect their Ministers, to give them rather stronger arguments and not to come along and produce the stuff that the Financial Secretary has produced today. My view is that the Chancellor had decided that something should be done in the national interest in relation to our balance of payments and in relation to relieving the world metal shortage. One ought not to be able to speak of the Chancellor being turned down by the Board of Inland Revenue, but that is what has happened. He was turned down, not on important arguments, but on arguments much less significant in the last resort than the powerful national arguments which have been used in support of the Clause.

One can see the kind of thing which would be uppermost in the minds of the Board of Inland Revenue. In my view, the Chancellor should have taken the broader line. He should have looked it the broad problem of the national interest and said, "I am very sorry, but this has got to be done", or he should have asked for some other way of doing it.

It is entirely regrettable that we have had this reply. I am not going to say that in this case as in the last one we were debating it was simply a question of bureaucracy gone mad. I think it was the case with vinegar. It may have been that the Economic Secretary put a had case but it may have been that the Financial Secretary, as we would expect, could have put a bad case better; but on this one, tin mining, which is a major problem, it would appear that, in a narrow, not unimportant, Departmental Inland Revenue consideration, some distinguished civil servants in that organisation thought that this proposal would create a precedent, and it would appear that they were powerful enough to override what should have been the Chancellor's first regard, that is, regard for the national interest and what I believe to be the united will of this House—because I have not yet heard a single Member, in Committee or today, really rebut the case which has been put forward.

As I have said, this is very, very disappointing. We have had a half promise, for what it is worth, that the Chancellor will look again at a mineral resources survey, but in Committee I said that we wanted these Clauses and the mineral resources survey, too. Now we are not getting this Clause, and we are very doubtful about what we shall get from the mineral resources survey. I am afraid that the Financial Secretary's argument was very disappointing.

He will be in no doubt at all, because I made it very clear in Committee, that we regard it as sufficiently important as to take our hon. Friends and, I am sure, quite a number of hon. Gentlemen opposite into the Division Lobby. I would have hoped that this would not have been necessary. I do not want to score any cheap debating or party success from taking a number of hon. Gentlemen opposite into our Division Lobby, although we always welcome them. We do not see them very often, and we tend to get different ones at different parts of the Finance Bill. I for one would not think it remarkable if we found the hon. Gentleman the Member for Bodmin (Mr. Marshall) in our Lobby. We should be glad to see him, of course. That would be entirely consistent with the line he has taken upon this matter throughout the last few years. However, I would far rather feel, as I thought in Committee, that there would be no need for anyone to go into the Lobby. We hoped that if not this Clause an alternative suitable one could have been put into the Bill, and we are very disappointed to find that that is not in fact the case.

Mr. Hayman

The speech of the Financial Secretary will cause deep disappointment in Cornwall, because there were high hopes after the Chancellor's speech of 21st June that there was really a chance of this special concession for which we are asking in this Clause being granted so as to enable new mines to be started. The Financial Secretary mentioned a figure of £500,000 for setting a new tin mine going in Cornwall. It might cost very much more even than that. It is really a speculation. We are not asking the Government to speculate money, although they might well be justified in doing so, because, after all, tin is indigenous in Cornwall and experts are agreed that great quantities of it are still there; but setting a new mine going, with the necessary exploration, mostly through granite, is extremely costly.

I feel that the Financial Secretary tonight was delivering in the main the speech which he was prepared to give

us on 21st June. One cannot but feel that the Chancellor himself realised that the Financial Secretary was going to put a damper on our Clauses and, therefore, replied himself. He spoke with great fervour and sincerity, too, in his speech, saying that he was deeply impressed by the arguments of my right hon. Friend the Member for Huyton (Mr. H. Wilson) and of hon. Members on both sides.

My constituency used to be known as the mining constituency of Cornwall, and most of our older people still regard tin mining as the fundamental industry of Cornwall. Not only the people employed in sinking a mine, working a mine, developing a mine, are involved, but all sorts of ancillary industries are drawn into the orbit. I mentioned in my speech on 21st June that we were a local employment area, but we have not got many benefits from the Local Employment Act, and the Town Council of Penryn only last week expressed its great disappointment at the lack of help which has come from the Board of Trade.

I do not want to prolong this debate, but I tell the Financial Secretary that when tomorrow the mining and financial experts in Cornwall read his speech and find that he has told us—and told them, in effect—that they are probably better off under existing conditions than they would be if this Clause were added to the Bill, they will be extremely shocked. I can tell him that they are great supporters of his. I hope that in future they will support my party as being the party of sincerity, a party which would carry out a proper mineral resources survey—and will do it when we get power.

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

The House divided: Ayes 147, Noes 201.

Division No. 236.] AYES [7.26 p.m.
Ainsley, William Chetwynd, George Fletcher, Eric
Alien, Scholefield (Crewe) Corbet, Mrs. Freda Foot, Michael (Ebbw Vale)
Awbery, Stan Crossman, R. H. S. Gaitskell, Rt. Hon. Hugh
Bacon, Miss Alice Cullen, Mrs. Alice Ginsburg, David
Benson, Sir George Darting, George Gourlay, Harry
Blyton, William Davies, G. Elfed (Rnondda, E.) Grey, Charles
Boardman, H. Deer, George Griffiths, W. (Exchange)
Bowden, Herbert W. (Leics, S.W.) Diamond, John Grimond, J.
Bowles, Frank Dodds, Norman Hale, Leslie (Oldham, W.)
Boyden, James Driberg, Tom Hall, Rt. Hn. Glenvil (Colne Valley)
Braddock, Mrs. E. M. Ede, Rt. Hon. C. Hamilton, William (West Fife)
Broughton, Dr. A. D. D. Edelman, Maurice Hannan, William
Butler, Herbert (Hackney, C.) Edwards, Robert (Bilston) Hayman, F. H.
Castle, Mrs. Barbara Edwards, Walter (Stepney) Henderson, Rt. Hn. Arthur (Rwly Regis)
Chapman, Donald Evans, Albert Hilton, A. V.
Holman, Percy Marshall, Douglas Skeffington, Arthur
Houghton, Douglas Maxwell-Hyslop, R. J. Slater, Mrs. Harriet (Stoke, N.)
Howell, Charles A, (Perry Barr) Mellish, R. J. Slater, Joseph (Sedgefield)
Howell, Denis (Small Heath) Mendelson, J. J. Smith, Ellis (Stoke, S.)
Hoy, James H. Milne, Edward J. Soskice, Rt. Hon. Sir Frank
Hughes, Emrys (S. Ayrshire) Mitchison, G, R. Spriggs, Leslie
Hughes, Hector (Aberdeen, N.) Monslow, Walter Stewart, Michael (Fulham)
Hunter, A. E. Moody, A. S. Stones, William
Hynd, H. (Accrington) Mort, D. L. Strachey, Rt. Hon. John
Hynd, John (Attercliffe) Moyle, Arthur Stross, Dr. Barnett(Stoke-on-Trent, C.)
Jay, Rt, Hon. Douglas Mulley, Frederick Swain, Thomas
Johnson, Carol (Lewisham, S.) Neal, Harold Swingler, Stephen
Jones, Rt. Hn. A. Creech(Wakefield) Noel-Baker, Francis (Swindon) Symonds, J. B.
Jones, Dan (Burnley) Oliver, G. H. Taylor, John (West Lothian)
Jones, Elwyn (West Ham, S.) Owen, Will Thompson, Dr, Alan (Dunfermline)
Jones, J. Idwal (Wrexham) Padley, W. E. Thornton, Ernest
Jones, T. W. (Merioneth) Paget, R. T. Tomney, Frank
Keiley, Richard Pavitt, Laurence Ungoed-Thomas, Sir Lynn
Key, Rt. Hon. C. W. Pearson, Arthur (Pontypridd) Wainwright, Edwin
King, Dr. Horace Peart, Frederick Warbey, William
Lawson, George Pentland, Norman Weitzman, David
Lewis, Arthur (West Ham, N.) Popplewell, Ernest White, Mrs. Eirene
Lipton, Marcus Price, J. T. (Westhoughton) Whitlock, William
Logan, David Probert, Arthur Wilcock, Group Capt. C. A. B.
Loughlin, Charles Pursey, Cmdr. Harry Wilkins, w. A.
Mabon, Dr. J. Dickson Randall, Harry Willey, Frederick
McCann, John Roberts, Goronwy (Caernarvon) Williams, W. T. (Warrington)
MacColl, James Robertson, John (Paisley) Willis, E. G. Edinburgh, E.)
Mclnnes, James Robinson, Kenneth (St. Pancras, N.) Wilson, Geoffrey (Truro)
McKay, John (Wallsend) Rogers, G. H. R. (Kensington, N.) Wilson, Rt. Hon. Harold (Huyton)
Mackie, John (Enfield, East) Ross, William Winter-bottom, R. E.
McLeavy, Prank Scott-Hopkins, James Woof, Robert
Manuel, A. C. Short, Edward
Mapp, Charles Silverman, Julius (Aston) TELLERS FOR THE AYES:
Marsh, Richard Silverman, Sydney (Nelson) Mr. Redhead and Mr. Irving.
Allason, James Donaldson, Cdr. C. E. M. Hutchison, Michael Clark
Arbuthnot, John Doughty, Charles Iremonger, T. L.
Ashton, Sir Hubert Duncan, Sir James Jackson, John
Barber, Anthony Elliot, Capt. Walter (Carshalton) James, David
Barlow, Sir John Elliott, R.W.(Nwcstle-upon-Tyne, N.) Jenkins, Robert (Dulwich)
Barter, John Emery, Peter Johnson, Dr. Donald (Carlisle)
Baxter, Sir Beverley (Southgate) Errington, Sir Eric Johnson, Eric (Blackley)
Beamish, Col. Sir Tufton Farey-Jones, F. W. Kerans, Cdr, J. S.
Bell, Ronald Farr, John Kerby, Capt. Henry
Bennett, F. M. (Torquay) Fell, Anthony Kershaw, Anthony
Bevins, Rt. Hon. Reginald Finlay, Graeme Leavey, J. A.
Biggs-Davison, John Fisher, Nigel Leburn, Gilmour
Bingham, R. M. Fletcher-Cooke, Charles Legge-Bourke, Sir Harry
Bishop, F. P. Fraser, Ian (Plymouth, Sutton) Lewis, Kenneth (Rutland)
Black, Sir Cyril Gammans, Lady Lindsay, Martin
Bossom, Clive Gardner, Edward Linstead, Sir Hugh
Bourne-Arton, A. Glover, Sir Douglas Litchfield, Capt. John
Box, Donald Good-hart, Philip Long-bottom, Charles
Boyle, Sir Edward Gower, Raymond Loveys, Walter H,
Brewis, John Grant, Rt. Hon. William Low, Rt. Hon. Sir Toby
Brown, Alan (Tottenham) Green, Alan Lucas-Tooth, Sir Hugh
Browne, Percy (Torrington) Gresham Cooke, R. McAdden, Stephen
Bullard, Denys Grimston, Sir Robert MacArthur, Ian
Bullus, Wing Commander Eric Grosvenor, Lt.-Col. R. G. McLaren, Martin
Burden, F, A. Gurden, Harold McLaughlin, Mrs. Patricia
Butcher, Sir Herbert Hall, John (Wycombe) Maclean, Sir Fitzroy (Bute & N. Ayrs.)
Campbell, Gordon (Moray & Nairn) Hamilton, Michael (Welling-borough) McMaster, Stanley R.
Carr, Robert (Mitcham) Harris, Frederic (Croydon, N. W.) Maddan, Martin
Channon, H. P. G. Harrison, Brian (Maldon) Maitland, Sir John
Chataway, Christopher Harrison, Col. Sir Harwood (Eye) Manningham-Buller, Rt. Hn. Sir R.
Chichester-Clark, R. Harvey, John (Waltham-stow, E.) Markham, Major Sir Frank
Clark, William (Nottingham, S.) Harvie Anderson, Miss Marten, Neil
Clarke, Brig. Terence (Portsmth, W.) Hay, John Mathew, Robert (Honiton)
Cole, Norman Heald, Rt. Hon. Sir Lionel Matthews, Gordon (Meriden)
Cooke, Robert Hicks Beach, Maj. W. Mawby, Ray
Cooper-Key, Sir Neill Hill, Dr. Rt. Hon. Charles (Luton) Maydon, Lt.-Comdr. S. L. C.
Cordeaux, Lt.-Col, J. K. Hill, Mrs. Eveline (Wythenshawe) Mills, Stratton
Costain, A. P. Hill, J. E. B. (S. Norfolk) Montgomery, Fergus
Courtney, Cdr. Anthony Hirst, Geoffrey More, Jasper (Ludlow)
Craddock, Sir Beresford Hobson, John Morrison, John
Cunningham, Knox Hocking, Philip N. Mott-Radclyffe, Sir Charles
Curran, Charles Holland, Philip Nabarro, Gerald
Dance, James Hopkins, Alan Nugent, Sir Richard
d'Avigdor-Goldsmid, Sir Henry Hornby, R. P. Oakshott, Sir Hendrie
Deedes, W. F. Hornsby-Smith, Rt. Hon. Patricia Osborn, John (Hallam)
de Ferranti, Basil Howard, John (Southampton, Test) Page, John (Harrow, West)
Digby, Simon Wing-field Hughes-Young, Michael Page, Graham (Crosby)
Partridge, E. Sharples, Richard Vaughan-Morgan, Rt. Hon. Sir John
Pearson, Frank (Clitheroe) Shaw, M. Vosper, Rt, Hon. Dennis
Peel, John Shepherd, William Wakefield, Edward (Derbyshire, W.)
Pickthorn, Sir Kenneth Skeet, T. H. H. Walder, David
Pilkington, Sir Richard Spearman, Sir Alexander Walker, Peter
Pitt, Miss Edith Speir, Rupert Walker-Smith, Rt. Hon. Sir Derek
Pott, Percivall Stanley, Hon. Richard Ward, Dame Irene
Powell, Rt. Hon. J. Enoch Stevens, Geoffrey Wells, John (Maidstone)
Price, David (Eastleigh) Storey, Sir Samuel Whitelaw, William
Prior, J. M. L. Studholme, Sir Henry Williams, Dudley (Exeter)
Proudfoot, Wilfred Sumner, Donald (Orpington) Williams, Paul (Sunderland, S.)
Quennell, Miss J. M. Taylor, Edwin (Bolton, E.) Wills, Sir Gerald (Bridgwater)
Rawlinson, Peter Temple, John M. Wise, A. R.
Redmayne, Rt. Hon. Martin Thomas, Leslie (Canterbury) Wolrige-Gordon, Patrick
Rees-Davies, W. R. Thompson, Kenneth (Walton) Wood, Rt. Hon. Richard
Renton, David Thompson, Richard (Croydon, S.) Woodhouse, C. M.
Rippon, Geoffrey Tiley, Arthur (Bradford, W.) Woodnutt, Mark
Roots, William Turner, Colin Woollam, John
Ropner, Col. Sir Leonard Turton, Rt. Hon. R. H.
Royle, Anthony (Richmond, Surrey) van Straubenzee, W. R. TELLERS FOR THE NOES:
Seymour, Leslie Vane, W. M. F. Mr. Gibson-Watt and Mr. Noble