§ Mr. Graham Page (Crosby)
I beg to move Amendment No. 44, in page 6, line 21, to leave out "furnace".
This Amendment has the virtue of brevity. The brevity of an Amendment is always in in-verse proportion to its importance, at least to the person who is moving it.
This is an Amendment to Clause 6 which is the Clause setting out the cases in which Customs or Excise duty on 1000 hydrocarbon oils is not to be payable. The duty is not to be payable when the oil is used as a material or a solvent in an industrial process. The Clause sets out two schemes for dealing with such cases. If I have understood the Clause correctly, the first scheme is where the oil is free of duty when one adds a chemical additive to it and if one cannot do that one reclaims the duty afterwards, but that is not the part of the Clause with which my Amendment is concerned.
My Amendment is concerned with the second scheme under the Clause, that of a particular use of light oils. Perhaps I might explain it in this way. There are considerable advantages in certain industrial processes, particularly in the steel industry, in using light oils as an alternative source or an additional source of furnace fuel. By light oils I mean the light petroleum distillate which is akin to motor spirit. Any industrial concern which desires to gain advantage of these modern processes of using light oil in that way is faced at the moment with the duty of 2s. 9d. a gallon as opposed to the duty on the ordinary fuel. Subsection (4) seeks to remedy that by turning those light oils, for duty purposes, into ordinary fuel oils provided that they are used, as the subsection is phrased, as "a furnace fuel."
Obviously, the Chancellor should in this way encourage technical progress in industry. Subsection (4) as it stands will not only encourage that technical progress in industry, but it will also benefit the British refineries by giving a better balance of demand of the different types of oil and, therefore, a better balance of production in the British refineries.
But subsection (4) does not go quite far enough if it is to take advantage of technical progress. By referring specifically to "furnace" fuel, it makes an invidious distinction between two very beneficial industrial processes, exempting one process and not another; it is the other which is really the advanced one, but which is not, as the Clause stands, within the exemption granted by this subsection.
The process to which I refer is this. Light oils are used for the enrichment of flue gases from blast furnaces. Those flue gases can be used beneficially in the 1001 furnaces themselves, and the process of returning the gases, as it were, to the furnace is included within subsection (4). On the other hand, the gases may also be used, and better used, in gas engines, but if they are used in gas engines they cannot, I understand, be regarded as being used as "furnace" fuel.
This is where subsection (4) falls short of taking advantage of present technical progress. The presence of gases in the furnace flue is something different from the use of those gases as a furnace fuel, and the process which I now have in mind would not be covered by subsection (4) as it stands.
If the purpose of subsection (4) is, as my hon. Friend the Financial Secretary said on Second Reading, to enable the potentialities of these fuels to be explored, it is most unwise to make this distinction between whether the gas is returned to the furnace or used in a gas engine. It is quite certain that, if the Clause were amended so as to omit the word "furnace", the steel industry, and other industries, too, probably, would be encouraged to develop the process of using enriched flue gases in gas engines. If the subsection stands as it is, on the other hand, it will have the sort of effect that the old predecessor of Schedule A tax, the window tax, had—it reduced the number of windows by making people block up window apertures.
§ Mr. Maurice Macmillan
Do I understand my hon. Friend to refer to the use of the gases after they have been burnt in the furnace for other purposes? I am not quite clear. Is he referring to a byproduct rather than the direct product?
§ Mr. Page
As I understand, the gases are produced from the use of light oils and are returned again, but not reburnt by the furnace; they are used in gas engines.
My hon. Friend may say that subsection (5) allows for regulations to be made which might cover this proposition, but I do not think that regulations could be made to cover the particular process to which I am referring if the word "furnace" remains in subsection (4). I am not a technical man and I do not find it easy to explain processes of this kind, but I think that it is fairly simple to understand. I sug- 1002 gest that it would be entirely in accordance with Government policy for the modernising of industry and for taking advantage of technical advance, encouraging industries themselves so to advance, to amend this subsection as I have proposed. I hope that my hon. Friend will be able to accept the Amendment.
§ Mr. Maurice Macmillan
I much regret having, to tell my hon. Friend the Member for Crosby (Mr. Graham Page) that I cannot accept the Amendment as it stands because its effect, as I see it, would be to exempt from duty petrol used as an ordinary fuel for engines. This, of course, would go extremely wide.
Like my hon. Friend, I am no technician in these matters, but, as judge the point, his argument is that the Clause as it stands does not fulfil the full range of purposes for which it was designed. It is a Clause which was to some extent governed by the technical considerations put forward by the steel industries concerned, and it was largely to encourage technical advance and more modern methods in these industries that the Clause was drafted. The enrichment of flue gases to be burnt in furnaces was a process of which a point was made, and this is the first time I have heard from private sources, from the industry or from anyone else about flue gases used to drive engines. No request for the inclusion of that process was made.
I should like to go into the question. The object of the Clause is quite clear, and I can say, without encouraging my hon. Friend to hope too much, that if we find that we have, in effect, drafted it so that it does not fulfil its object entirely, we shall look at it again and bring the matter forward at a later stage.
§ Mr. Graham Page
I am very grateful for those words. I shall endeavour to provide my hon. Friend with technical information on the particular process which I have in mind. In the light of the assurance which he has given, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause ordered to stand part of the Bill.
§ Schedule 6 agreed to.