§ Mr. CallaghanMy first proposal for increasing taxation is to raise the duty on petrol and other light hydrocarbon oils and diesel oil for road vehicles by 6d. a gallon, to take effect from 6 p.m. tonight. This will yield £32 million in 1964–65 and £93 million in a full year, and will raise the retail price index by one-fifth of a point immediately and, because of the transport element in the cost of other things, by a further small fraction spread over a period of time. The higher rate of duty will be taken into account in calculating the amount of the export rebate, and it is estimated that it may raise the cost of the rebate scheme to about £75 million a year.
1037 This increase in duty will exercise an appreciable and immediate disinflationary effect and will make an important contribution towards my general objective of preventing an increase in the pressure of demand. The consequential change which is necessary in the rate of duty on certain imported goods containing hydrocarbon oil is being made by statutory order.
I am aware that this increase in the petrol duty will add to the difficulties of those passenger transport undertakings which operate stage bus services. I have, therefore, asked my right hon. Friend the Minister of Transport to embark on early discussions with representatives of these undertakings with a view to finding a means of giving them some relief in respect of the additional cost of those services which this increase in duty will cause.