HC Deb 23 June 1965 vol 714 cc1823-44

(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 operations, shall be exempt from the corporation 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 course of searching for, discovering or testing mineral deposits or winning access thereto.—[Mr. Maxwell-Hyslop.]

Brought up, and read the First time.

Mr. R. J. Maxwell-Hyslop (Tiverton)

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

This may have a ring about it of worthiness in your memory, Mr. Steele, that you perhaps cannot place. It would only exempt for three years new and not existing non-ferrous metal mines in the United Kingdom from Corporation Tax. What is it necessary to show in order to establish an overwhelming case for what is obviously an exception to the general rule of the Bill and of all previous Finance Acts? First, there is the trend in world supply of tin in the last four years.

Obviously, the major change is in the position of Malaysia. Four years ago, Malaya, as it then was, had not encountered the confrontation policy of Indonesia. Now, of course, both the position of Malaysia and, even more so, the supply of raw materials from outside its frontier has encountered a major change. I believe that about 40 per cent. of the tin exported by Malaysia before the confrontation came from Indonesia into Singapore and then was included in the total of exports as a re-export element. Now, of course, this large proportion is lost. Indonesia is endeavouring to find other channels of distribution, but with incomplete success. So, from the point of view of the major supplier to the world market—Malaysia—the supply is, to put it mildly, uncertain.

The second major source of supply traditionally has been Bolivia. In recent months, the President, General Barrientos, has exiled the Vice-President, Senor Lechin, from the country. The Vice-President was also president of the Mineworkers' Union. The result has been a virtual state of siege so that the reorganisation of Bolivian tin mines, which were in a parlous condition, both financially and organisationally, has once more been postponed into the indefinite future.

However, even had that reorganisation already taken place the challenge from Bolivian tin mines would still be diminishing because the richest accessible mines are being worked out and it is the poorer loads which are being worked now. In addition, the Bolivian mineworkers have a large supply of firearms with which they are able quite effectively to defy the central Government.

The Temporary Chairman

Order. I hope the hon. Gentleman will relate what he is saying to the Clause. He is going rather wide at the moment.

Mr. Maxwell-Hyslop

My point is that the less we can depend on foreign sources of tin to supply the British tinplate industry the more critical it becomes to us that we should encourage the development of domestic tin production. Unless we can guarantee a supply of tin for the tinplate industry, then our tinplate industry, particularly in South Wales, is at hazard.

The object of the Clause is to encourage our domestic tin production. I was endeavouring to show why it is that we need a greater measure of encouragement for British domestic tin production, which means in effect, Cornish tin production. We have been shown that Bolivia is no longer a reliable source.

The third change over the last of three or four years is that the considerable buffer stocks of tin which had been built up largely to act as a price stabilising factor are now completely exhausted and the price of tin therefore accurately reflects supply and demand, and as demand is consistently exceeding supply, the price is rising. In only the last four years the price of tin in this country has risen from £880 to £1,460 per ton, at which it stood yesterday. There is the evidence of the effect of the shortage on the price of tin at home, and this naturally must affect greatly the economic viability of the industry which uses it, namely, the tinplate industry.

What is the object of the new Clause? First and foremost it saves foreign currency. Both sides of the Committee will regard the saving of foreign currency as a highly commendable objective. Bolivian currency is hard, being South American, but we would do well to conserve all the Malaysian currency we can by increasing domestic production.

Secondly, as well as saving foreign currency we want so far as we are able in what is an elastic market to endeavour to stabilise the rising prices by increasing supplies. It is not within the power of the Committee to increase the available supply in Bolivia. Other provisions in the Bill will certainly discourage investment by this country in Malaysia, among other places such as Nigeria or other parts of the Commonwealth. However, it is within the power of the Committee to give extra incentives to our own domestic production. Thirdly, it so happens that where these minerals are accessibly situated is also an area of higher than average unemployment.

Therefore, we would achieve three objectives which I am sure both sides of the Committee share and which could be achieved—and here is the miracle which will appeal, I hope irresistibly, to the Minister without Portfolio—at no cost to the Treasury. I do not know how many Amendments have come before the Committee of which it could literally be said that they were at no cost to the Treasury.

As these concessions do not apply to existing enterprises, the Treasury is not sacrificing any revenue. Moreover, the occasion to which the new Clause applies does not arise unless and until there are new tin-mining enterprises in the United Kingdom. I have used tin as an example because I have that metal particularly in mind, but the new Clause would apply to any other non-ferrous metal. I believe that there is a gold mine in Wales which is still operative and I see no reason why we should not also encourage domestic gold production.

Why is it that the present incentives are inadequate to attract sufficient capital into the Cornish tin-mining industry without any further assistance from taxation alleviation? First, tin comes in the form of lodes rather than in veins. It is extremely difficult to predict where tin will be found in workable paying quantities from taking sample drillings. It is a highly speculative form of investigation. Therefore, from that point of view, it is not of particular appeal to the money market, and the more so because in the same area, Cornwall, we have a highly attractive form of investment, china clay. China clay pits can be opened and closed at no very great expense or inconvenience, but once a tin mine is full of water the cost of pumping it out can be prohibitive.

As I have said, the cost to the Exchequer is nil on existing enterprises and if the provision were successful and it attracted further enterprises, then only for the first three years would those new enterprises be granted relief from Corporation Tax. If the Government share the objectives which I have enumerated and if they are concerned also with the future of the British tinplate industry—which anyway has a challenge on its hands from the aluminium industry, for tinplate is under attack from aluminium in the manufacture of containers—it is incumbent upon a Government interested in the tinplate industry, particularly in South Wales, to endeavour to take all steps which are reasonable and within their power to ensure a greater supply of domestically produced tin.

7.15 p.m.

One might ask whether it is reasonable to take steps which are within the Government's power and which will not result in a penny loss of revenue. If it is not reasonable, I do not know what reasonable means. That is why I look forward to hearing from the Minister without Portfolio that even though he may not have had sanction from the Cabinet to accept a new Clause, as this new Clause demonstrably cannot result in any loss of income to the Treasury, he will be perfectly entitled to accept it on its merits without Cabinet approval.

I very much hope that these arguments will not be lost on him, because if a proposal which has everything to be said for it and nothing to be said against it cannot be accepted in debate, what on earth is the point of having a debate? Judging from the number of hon. Members opposite, one might wonder what was the purpose of having a debate.

The actual form of the new Clause may prove of interest to the Minister. We all know that one of the Members of the Committee, one of its right hon. Members, sometimes referred to as the "First Lord of the Scillies" and to whom the West Country is not unknown, might well be sympathetic to a new Clause couched in such undeniably persuasive tones.

Mr. Geoffrey Wilson (Truro)

I support the new Clause. As the Committee will recognise, its wording is almost identical with that of a new Clause to the Finance Bill of 1961 moved by the right hon. Gentleman the Prime Minister on 21st June. A similar Clause was moved on 3rd July, 1961, to that year's Report stage of the Finance Bill by the right hon. Member for Sowerby (Mr. Houghton). On both occasions I supported those right hon. Gentlemen, as did a number of my hon. Friends, because that new Clause was very similar to another which had been suggested by Sir Douglas Marshall who was then the hon. Member for Bodmin. On that occasion, I pointed out—and it is relevant to point out again in connection with this new Clause—that although special tax treatment would be given to a single industry, a principle to which the Treasury always objects, there were special reasons why the tin-mining industry should be singled out for special treatment.

As my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has said, there is a world shortage of tin and there are peculiar difficulties in working the raw materials for this metal, because, as my hon. Friend said, it occurs in lodes and not in strata or veins, which means that trying to estimate what will be the result of any mining operation is extremely speculative, and many developers hesitate to work tin for that reason. There are also six points, particularly relevant to Cornwall, which should be borne in mind in connection with this new Clause. First it may be said beyond dispute that the Cornish tin mine industry did not decline because the supplies ran out. As anyone knows, there was for many years a very extensive Cornish tin mining industry, and it very largely diminished as a result not of a failure of supplies but because of cheaper production elsewhere in the world. Secondly, it is beyond dispute that there are still considerable quantities of tin in Cornwall. Thirdly, the price of tin is high and a shortage is beginning to appear in the world. Fourthly, this country imports large quantities of tin and any increased production in our home production would be of benefit to our balance of payments.

Fifthly, it is beyond dispute that Cornwall suffers from pockets of local unemployment from time to time because of the lack of diversification of her industries. If the tin mining industry and its ancilliaries could be revived it would be a very good thing from the employment angle. Lastly, it is also beyond dispute that in the two thousand years during which tin has been worked in Cornwall, mining has been dependent upon the physical strength and the intuitive knowledge of miners for the greater part of that time.

It was inevitable, despite their skill and ingenuity, that they should leave untapped a large number of sources which modern methods could develop so that the mere fact that there has been extensive tin mining in various areas does not mean that those mining areas are worked out. All those reasons, which I mentioned in the previous debate are still valid and in some respects are more important now than formerly. The price has certainly increased since then and if we can give any extra encouragement to tin mining it would be a very good thing from the national point of view.

Previous Chancellors have not been able to accept this new Clause and I could never understand why because, as has been pointed out, it would not cost anything. If one gives a tax holiday, which in effect this new Clause does, for-a limited period of 36 months to any new developer it means that the Revenue does not receive any taxation during that period. But the Revenue gets nothing now because very little development is going on. It is true there are now and there were not on the previous occasion when this matter was debated, some 18 prospects being looked at in Cornwall. So far none of them have got very far and there is the basic difficulty in connection with tin that it is so speculative that people hesitate to put money into it. Provisions of this sort are in operation in a number of other countries as a bait to induce developers to have a try with tin.

I feel that if the Government could see their way to accept this new Clause it might help the developing tin industry in the West Country, which would be of benefit to the whole nation. If it does not cost the Treasury anything I do not see why they should not accept this Clause.

Mr. James Scott-Hopkins (Cornwall, North)

I rise to support my hon. Friends in the case they have put forward to the Minister without Portfolio. I hope that he will look at this sympathetically. As my hon. Friend has said, this is a very moderate Amendment. I think that the main points have already been made. The only thing that leads me to doubt the wisdom of this is the fact that in days gone by the right hon. Gentleman the Prime Minister supported it. I rather wonder whether this is right or not, but putting that on one side I think that the main object must be to approach this from the national point of view.

My hon. Friend the Member for Tiverton (Mr. R. J. Maxwell-Hyslop) made a very strong case concerning the supplies of these non-ferrous metals to this country, the uncertainty of them and the fact that there could be difficulty over this.

I think, therefore, that from the national point of view it is very important to safeguard this. The point has been made by my hon. Friends that this will not cost the Treasury anything. It is true that in the past, previous Administrations have had to turn this down, but I think that the case is now different from this because my hon. Friends are putting forward a proposition that will apply only to those companies which start operations after the passing of this new Clause, should we succeed in making the Treasury change their mind, when they are in a position to make a profit and only then for 36 months. So the amount of safeguards that exist from the Treasury's point of view are very substantial.

My hon. Friend the Member for Truro (Mr. Geoffrey Wilson) said that trying to start a tin mine in Cornwall, which is the main area, is a very costly and expensive business. The wording of this new Clause says this concession should only arise within 36 months after the mine has first been brought into commercial operation. It could well be that during those 36 months the actual profits made could be very small indeed and the cost would be negligible. The point at issue is the fact that without some kind of concession, a gesture by the Government on this, it is very hard to see how we are going to encourage the opening up and the continuation of the very few existing tin mining operations that are being carried on at this moment.

In my view and those of my hon. Friends it is extremely important that we should do what we can to safeguard the supply of tin to our economy and to the industries which use tin. This is a very easy and cheap way. The Treasury will be able to help and encourage the development of further tin mining operations, particularly in Cornwall, and I think that this is one of the cases where the Treasury could be sympathetic. The Minister without Portfolio need not go back and look at various speeches that have been made in the past by right hon. and hon. Friends when similar Clauses have been moved by Sir Douglas Marshall and other of my right hon. Friends in the past. The conditions are different.

The Committee has been told how these conditions are different and I believe it is in the national interest, apart from the fact that it is also in the interests of Cornwall, that these mining operations should be given not only a safeguard but a certain amount of encouragement. The cost to the Treasury of this encouragement would be negligible.

I therefore hope that the Minister without Portfolio will be able to accept the principle underlying this Clause. Whether the wording is correct I do not think is all that important. The Minister without Portfolio should be able to say he approves the principle underlying this and that he wishes to encourage tin mining in this country, particularly in Cornwall, and will do what he can to see it encouraged because it is in the national interest. If he does not he is saying that in his view and that of the Government the tin mining industry of this country is worthless and of no importance. I cannot believe the Treasury will say this and I cannot believe this is the right view.

I strongly support the new Clause.

Mr. Maxwell-Hyslop

May I draw your attention Mr. Steele to the fact that there are fewer than 40 people present in the Chamber?

The Temporary Chairman (Mr. Thomas Steele)

Not at this time in the evening.

7.30 p.m.

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

In rising to support the new Clause which has been so ably proposed by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), I think that most of the hon. Gentlemen in the Committee will know that I have been trying to put forward the case of tin mines in Cornwall ever since I have been a Member of the House, for the last 15 years. I do not think that this is a party matter. If hon. Members turn to HANSARD of 21st June, 1961, c. 1514, they will see an extremely interesting and very good speech made by the Prime Minister in virtually exactly the same terms as those which have been used this afternoon and in which the right hon. Gentleman points out that this is not a party matter.

Reference has been made to Malaysia and Bolivia. I have always thought that from a defence point of view the proper encouragement of tin mining in Cornwall is not only necessary, but essential. We cannot rely on sources outside this country as much as we have done in the past, and it is only prudent that we should do everyhing we can to help the industry.

There is the question of employment. There are those who say, "That is ridiculous. All the present miners are foreign workers". I have one of the two existing tin mines in my constituency, at Geevor. The Cornish miners would come back to Cornwall if they felt that there was a future in this great industry, and I am sure that they would encourage their sons to go into the industry if they thought that there was a future in it and that things would improve.

The attendance on the benches opposite is very thin, but there is one hon. Member opposite who I know would be here if he could and that is the hon. Member for Falmouth and Camborne (Mr. Hayman). [HON. MEMBERS: "Hear, hear."] He takes a great interest in this matter. After all, his constituency is very much concerned with it. I am sure that I speak for all hon. Members when I say how sad we are that he is not able to intervene in this debate. I am sure that if he could do so he would support everything that we have said.

One thing which I dare say the hon. Gentleman would wish to inquire into is the future of the Camborne School of Mines. I wonder whether the Minister who is to reply can tell me anything about that.

The Temporary Chairman

He would be out of order if he did.

Mr. Howard

I cannot develop the point, except to say that if the school should be moved it would be a very bad decision.

I commend to the attention of hon. Members on both sides other than Members who represent Cornish constituencies who have all read it the excellent annual report of the Cornish Mining Development Association for the year 1964–65. I should like to make one or two quotations from it, because it is well worth the Committee's attention. The first quotation reads: It is probably true to say that Cornwall has never before been subjected to such a patient, systematic and scientific investigation as is now being undertaken. I know this only too well, because within less than 500 yards of where I live in Cornwall, near Marazion, there have been two test drillings. I should say that within a radius of half-a-mile there are no fewer than three test drillings.

Important firms like the Union Corporation and the Siamese Tin Syndicate are starting diamond drilling in Scorrier and Redruth, around Troon and over a wide area between Marazion and Crowan. These are all near where I live. Camborne Tin Ltd. has applied for permission to reopen Wheal Vor. Unfortunately, this application is held up owing to a dispute about water. You, Mr. Steele, would rule me out of order if I went into that matter.

Canadian interests are interested in the constituency of the hon. Member for Falmouth and Camborne where shaft sinking and underground developments are about to begin. Rhodesia-Katanga, Kleinwort Benson and Canadian Westfield Minerals have formed a company to examine the extension of certain lodes.

If hon. Members care to read this excellent document, they will see that there is real interest in the mining industry. I should like to draw attention to page 2 of it where Dr. James McDivitt—not the gentleman who went for a stroll in space, but an eminent American geologist has been investigating mineral exploration in Europe—says: Great Britain would seem to have the best developed negative attitude towards metal mining of the O.E.E.C. countries … Britain with its long history of mineral production and its very small present production would be one of the countries most likely to be rewarded by a thorough systematic reappraisal of its mineral resources, but the stitmulus seems to be lacking … and so the document continues.

A debate on tin was recently initiated in another place. The answer of the Government spokesman was this: I believe, however, that it would be entirely unrealistic to suppose that Cornish tin can ever make more than a very limited contribution to total home supplies."—[OFFICIAL REPORT, House of Lords, 18th March, 1965; Vol. 264, c. 482.] Really! Is that the attitude of a Government who say that they want to encourage home industry and employment? As my hon. Friends have said, what we propose would cost the Treasury nothing. The Government's view is most extraordinary.

The Cornish Mining Development Association's Annual Report states: Nothing less than the three year 'tax holiday' advocated by the Prime Minister, which is already granted by the Governments of Canada and Eire will be any good. Our own Government claims that it has given adequate relief to Cornish tin mining, but can it show that such relief even nearly approaches that which Canada, Eire, U.S.A., Australia, Rhodesia and South Africa have given?

The most important quotation is this: The mining companies are obviously doing the preliminary work in the hope that reason will prevail and that Britain will fall in line with other countries and adopt a more realistic attitude towards the taxation of the industry. If that hope is falsified the companies concerned may well decide to cut their losses and abandon the whole thing rather than risk very great sums of capital on shaft sinking and underground exploration, which is where the really heavy expenditure is involved, but which must follow the present drilling if new mines are to be brought into production". Surely this shows the Government how important the tin mining industry is. I know that at times it takes us a long time to get anything done. We have had some realisation and concessions on this matter, but I beg the Government to take into consideration what this new Clause means and to do something to help the mining industry and employment in this area where it is badly needed.

Mr. Peter Bessell (Bodmin)

Everyone in the West Country is, I think, very much indebted to the hon. Member for Tiverton (Mr. Maxwell-Hyslop) and to his hon. Friends for tabling this very important new Clause.

I should like to take this opportunity of paying a special tribute to my predecessor, Sir Douglas Marshall, who throughout his career in the House of Commons advocated reform of this kind and spared no effort to try to persuade successive Chancellors of the Exchequer to give special consideration to the needs of Cornwall in this respect.

It is true, as we have heard, that there is a world shortage of tin. It is also true that a great deal of interest is being shown in mining in Cornwall—a much greater interest than at any other time over the last 40 years. I know from discussions which I have had with at least one major international mining company that it would be prepared to make a considerable investment in Cornish tin if it could have the kind of tax concession which has been granted in similar circumstances by Governments of other countries.

The hon. Member for St. Ives (Mr. G. R. Howard) has mentioned that the Prime Minister has always been consistent in supporting this kind of Amendment to the Finance Bill. It is difficult for me to believe that the Minister with- out Portfolio can do other than accede to the request which we are making from this side of the Committee. Indeed, if he does not, it will be said that the words spoken by his right hon. Friend the Prime Minister in years past were meaningless and without sincerity.

We have heard, too, from the Government a great deal about their intention to encourage regional development. I and, I think, everyone on this side of the Committee are anxious to see this promise implemented. One of the ways in which regional development in Cornwall can be encouraged is by assisting the tin-mining industry to get back on its feet. There is nothing better than encouraging the industries which are indigenous to any part of the country. Indeed, some of us who are anxious to ensure that industrial development in Cornwall is not unsightly would particularly welcome any encouragement to the redevelopment of mining.

There is, moreover, the question of the economy generally. Anything which can be produced in this country, thus helping to reduce our total import bill, is a matter which demands the first attention of the Government. They have a profound duty to make certain that no avenue is left unexplored which can assist us in reducing the raw materials which we otherwise have to import.

I do not propose to delay the Committee at length, because the points which have already been made so admirably by the hon. Member for Truro (Mr. Geoffrey Wilson), the hon. Member for Cornwall, North (Mr. Scott-Hopkins) and the hon. Member for St. Ives do not need repetition. The case is clear. We have every right to expect that in view of past promises and the real need of development in the South-West, and particularly in view of the world shortage of tin, we shall have a favourable response from the Minister.

7.45 p.m.

Sir Eric Fletcher

The case for the new Clause has been forcibly and persuasively put by the hon. Member for Tiverton (Mr. Maxwell-Hyslop) and it has been equally cogently supported by the hon. Member for Truro (Mr. Geoffrey Wilson), the hon. Member for Cornwall, North (Mr. Scott-Hopkins), the hon. Member for St. Ives (Mr. G. R. Howard) and the hon. Member for Bodmin (Mr. Bessell), who has just spoken from the Liberal benches.

As has been said, I am sure that if my hon. Friend the Member for Falmouth and Camborne (Mr. Hayman) were with us today he would have spoken in the same sense, because, as we all know, this is a matter which is of the greatest interest to his constituents. The Committee will be glad to know that the latest reports which I have had about my hon. Friend are that he is making a good recovery, so much so that I am told that the Ministry of Housing and Local Government is almost complaining of the large number of letters that it is receiving from him about the housing problems of his constituents.

Like other hon. Members, I have always been interested in the County of Cornwall and I am familiar with some of the disused Cornish tin mines. We all know that tin has been mined in Cornwall since Roman times and of the importance attaching to a revival of the Cornish tin mines. The hon. Member has pointed out that the Cornish tin mines became disused because it was uneconomic to work them and he has pointed out that the difficulties in getting supplies of tin abroad are increasing owing to international developments.

To make a case for the new Clause, it is necessary to show that this novel procedure of a tax holiday is required as a stimulant to encourage companies to undertake fresh tin mining operations in Cornwall. As hon. Members have pointed out, this matter has been debated in the House of Commons on previous occasions and there was a recent debate in another place when my noble Friend the Parliamentary Secretary to the Board of Trade spoke on the subject. Since then, the position has been carefully reviewed by my right hon. Friend the Chancellor of the Exchequer and I am afraid that I must disappoint hon. Members opposite. My right hon. Friend has come to the conclusion that the existing allowances are fully adequate to give potential developers of tin mines in Cornwall all the encouragement and assistance that is required to enable them to undertake operations there.

Not only will anybody undertaking tin mining operations in Cornwall be entitled to the generous initial and annual investment allowances, but in addition, Cornwall being in a development district, any development of a Cornish tin mine will get the free depreciation which has been available since 1963. The result is that, in all probability, anybody undertaking operations in Cornwall would find that in view of these allowances, including depreciation allowance, there would in any event be very little tax to pay during the first three years.

One hon. Member suggested that this concession would not cost the Treasury anything. If no profits are made, no tax would be payable. The initial allowances, the investment allowances and the depreciation allowances as now available to mining developers are in themselves, however, considerable taxation attractions and should, in our view, be quite sufficient to justify any prospective developer in undertaking the development of Cornish tin mines or any of the other operations that would be covered by the Clause.

In saying that, I do not want hon. Members to think that we are in any way unsympathetic or wish to discourage tin-mining operations in Cornwall or elsewhere in the South-West, but we wish to emphasise the great tax concessions which at present exist. It does not seem to us that the special case of the Cornish tin mines is sufficient to justify an entirely novel departure in our tax system for which there is no precedent.

Mr. Maxwell-Hyslop

When the hon. Gentleman says "we", does he include the Prime Minister? Will he explain the grounds on which his right hon. Friend has completely changed from speaking for the equivalent of 13 columns of HANSARD in advocating an equally specific new Clause with only one difference, Corporation Tax instead of Profits Tax? Surely, we are entitled to know why the First Lord of the Treasury has completely changed his mind. We have not had one word of explanation from the Treasury Bench.

Sir Eric Fletcher

The Prime Minister is a member of the Government, and on this occasion I speak for the Government. I am familiar with what my right hon. Friend said during the debate to which the hon. Gentleman referred, but since then there has been a notable change in the situation in that the industry will benefit from the increase from 20 per cent. to 30 per cent. in the investment allowances for capital expenditure on new plant and machinery and on the construction of mining works.

Therefore, there are additional taxation advantages available now over and above what were available when my right hon. Friend made the statement to which reference has been made.

Mr. William Clark

I am sure that the Committee is indebted to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) for having moved the new Clause in such reasonable terms. His résumé of the position, both internationally and at home, was extremely good and fair, and I do not think that anybody can be in any doubt as to the position of the tin mining industry and the potentiality of that industry in Cornwall.

I am sure that the Committee is delighted to hear the news about the hon. Member for Falmouth and Camborne (Mr. Hayman). We look forward to seeing him back in his place as soon as he has fully recovered, because he has always shown a great interest in this matter, as has my hon. Friend the Member for St. Ives (Mr. G. R. Howard), who, like the hon. Member for Falmouth and Camborne, has one of the Cornish tin mines in his constituency and is aware of the various problems, and in fact the potentiality, of the industry.

I think that my hon. Friend made a valid point when he said that more and more people would be brought back to the mines if additional incentives were provided. What my hon. Friend the Member for Tiverton is asking for in the new Clause is a three-year tax holiday. The Minister is right when he says that if no profits are made one can hardly give a tax holiday. We knew that before we started the debate.

The Minister has not answered the point about the world shortage of tin to which the hon. Member for Bodmin (Mr. Bessell) referred in his interesting speech. There is a world shortage of this commodity and there is uncertainty about the situation in Malaysia and Bolivia. There is uncertainty throughout the whole of our sources of supply of this non-ferrous metal. I think that the Minister might have said something about that, just as he might have said something about the saving in foreign currency which would result from increasing production in this country.

As one of my hon. Friends pointed out, when this matter was last debated the cost of tin was about £880 per ton. Today, it is £1,459. There has been a tremendous jump in the price, and this leads to two conclusions: first, that there is uncertainty in the international tin markets; and, secondly, that production is less than demand. This is why there is so much force in the argument that we should do everything possible to encourage the production of this nonferrous metal, and the only way in which we can do it in a Finance Bill is by fiscal methods. Many other countries provide concessions for tin mining. I think that it was my hon. Friend the Member for St. Ives who brought out this point.

The Minister made great play of the tremendous success achieved by the last Conservative Administration with regard to investment and free depreciation allowances, but I thought that he was a little ungenerous in not paying tribute to the previous Administration by pointing out that these allowances had been of immense benefit not only to mining concerns, but to industry generally throughout the country. We accept that the tin mining industry has been helped, but what the Minister did not say was that since 1964, since the Labour Government came into power, and under the provisions of this Finance Bill, these incentives have been devalued and depreciated to a considerable extent because of the imposition of Corporation Tax.

It is not my intention to go over the debate that we had on that very important subject. Suffice it to say that everybody in the country—and certainly hon. Members on these benches—is concerned about the fact that the imposition of Corporation Tax has devalued the effect of the investment allowances. My hon. Friend the Member for Cornwall, North (Mr. Scott-Hopkins) was right when he pointed out that the position now, from a tax point of view, was worse than it was before the Government came to power. Corporation Tax will devalue investment allowances, and my hon. Friend the Member for Tiverton is trying to restore the incentives to the tin mining industry.

My hon. Friend the Member for Truro (Mr. Geoffrey Wilson), who has played a considerable part in debates on the tin mining industry, pointed out how essential it was that we should do nothing to harm this industry, and that, in fact, we should do as much as we can to help it. What the Minister does not realise is that if one is trying to help an industry, and particularly this industry, one has to remember that its investment potential is the spur to make people put their money into it. Unfortunately, Corporation Tax does not provide this incentive and that is why my hon. Friend is seeking to restore the incentive which was provided before the imposition of this new tax.

Corporation Tax will deter participators from investing not only in the tin mining industry, but in any other industry. As my hon. Friends have pointed out, large sums of money are required for exploration. The tin comes in lodes and not in veins, which means that several test drillings are required. It is an extremely expensive business, and this is all the more reason why this industry, with its high capital content, should be encouraged rather than penalised.

Many of my hon. Friends have referred to the debate which we had in 1961 on this subject. Since then the Conservative Government have helped every industry in the country by increasing investment allowances, and in many cases allowing free depreciation. I am certain that the imposition of Corporation Tax will to a large extent mitigate against the increased benefits provided by the previous Administration.

As has been pointed out, in 1961 the Prime Minister—he was then the Leader of the Opposition—not only moved a new Clause dealing with this subject, but withdrew it, and on Report the right hon. Member for Sowerby (Mr. Houghton) moved a new Clause on the subject and went into the Lobby in support of it, as did the Prime Minister. In fact, the Minister without Portfolio also went into the Lobby to support it, and all that we are asking him to do is to tell us why he is being so inconsistent. It is no good him saying that he is inconsistent because in the last 13 years the Conservative Administration did so much for the tin mining industry, because since then the Socialists have decreased the tax benefits that were available.

As one of my hon. Friends said, this new Clause may not be correctly drafted, and we are grateful to the Minister for not sheltering behind that excuse. He was quite frank in his reply. He said that his right hon. Friend the Chancellor had looked at this. He said nothing about consistency, but I agree with my hon. Friend the Member for Cornwall, North, who said that if the Minister does not accept the new Clause people outside, and particularly the people in Cornwall, will know that the Government are indifferent to the pleas for help for the tin mining industry. Not only that: they will realise, as they will in many other respects, that the word of the Government, given when they were in opposition, still cannot be trusted.

8.0 p.m.

Mr. Scott-Hopkins

I hope that the Minister will reconsider the position. His argument was the most inconsistent that we have had. I ask him to consider the matter again. My hon. Friends have pointed out quite clearly the way in which the situation has changed since the speech of the Prime Minister's which has been referred to. They have changed for the worse under this Government. The Government's proposals have had no beneficial effect on this industry, although hon. Members opposite have said that they wish it to be put upon a sound economic basis.

It is disgraceful for the hon. Member to say that he is bearing in mind the present situation. I can assure him that we have local knowledge of what goes on in Cornwall. We know the difficulties that the industry is facing. We know how difficult it is for companies who want to open up existing mines. It is a costly business. The existing tax reliefs are being eroded by the Government and the result has been bad.

I am sorry that the hon. Member has had to repudiate the case put forward by the Prime Minister in 1961. It can properly be argued that the situation for the industry is getting even worse than it was because of the action taken by the Government.

Mr. Maxwell-Hyslop

This is obviously the moment of truth—the moment of public disgrace for the Prime Minister, with only two of his own back benchers present to hear about it. His Front Bench denies the proposition that the Prime Minister advanced, in 13 columns of HANSARD, on 21st June, 1961. As the hon. Member said, the right hon Gentleman is Prime Minister now. Does that mean that he does not believe what he said at the time, or is it the proposition that the Prime Minister spent 13 columns of HANSARD in 1961 merely in asking for another 10 per cent. allowance?

Not one proposition advanced in favour of the new Clause has been denied by the hon. Gentleman. He has not denied that not one new tin mine has been opened since the Clause was first put forward. He has not denied that it would not cost the Treasury any existing revenue. He has not asserted that the remedial measures taken by the Conservative Government have not been effective. The propositions put forward by the Prime Minister in 1961 are as true today as they were then. Why is it that the Government benches are empty at the time of the disgrace of their own Prime Minister by the Government Front Bench? It is an extraordinary thing that no answer to the debate should have been put up.

There may be good reasons why the Prime Minister has decided that the case that he put forward so cogently in 1961 is no longer true, but is not the Committee entitled to know what those reasons are? Is it not entitled to have the debate answered by the Government? Is it to be assumed that when the right hon. Gentleman who is now Prime Minister was in opposition, he could put forward with all the force at his command a series of arguments, but that when he came to office he could ignore them without offering any explanation, except to say that the Conservative Government increased the tax allowance by 10 per cent.?

What is the justification for claiming that all is now well as a result of a 10 per cent. allowance? We have not had a word of justification. All that we are invited to do is to believe that all will be well, because there is a Simon de Montfort party on at the moment. That is the implicit argument put forward by the Treasury Ministers, and it is a poor one.

Mr. Bessell

I am sorry to take up further time of the Committee, but I must add my voice of protest to those which have already been raised. What does the Prime Minister's word mean? How is it possible for him, when in opposition, to advocate a course of action which is today being disavowed by his own Front Bench? This is something which will not be forgotten in Cornwall, and I assure the hon. Member that it will not be forgiven, either.

It is not surprising that the Government's party lost two of their deposits in Cornwall in the last General Election—one in my constituency and the other in North Cornwall. The reaction to today's announcement could conceivably result in further lost deposits for the Labour Party in Cornwall at the next election.

Question put and negatived.