FINANCE BILL

HC Deb 19 May 1965 vol 712 cc1590-628

Again considered in Committee.

Mr. Powell

I was concluding my appeal to the Government to substitute "14th" for "6th" to remove these difficulties and thus to banish the sense of unfairness and grievance which, I can assure them, rankles in the minds of many thousands of law-abiding citizens as a result of the present form of this Bill.

Mr. MacDermot

The arguments have been deployed so fully and with such clarity by the right hon. Member for Wolverhampton, South-West (Mr. Powell) that I rise at once to answer them, also because he has deployed them with such clarity that the fallacies in the arguments already lie fully revealed. In my imagination I was picturing the even greater clarity with which the right hon. Gentleman would have answered his own arguments if he had had the opportunity to do so.

As the right hon. Gentleman says, this point has excited considerable interest among the people affected, many of whom feel that they have suffered an injustice. I hope to convince the Committee and, through the Committee, them that it is not an injustice and that for my right hon. Friend to have taken any other course in this matter would itself have been unjust.

The Ways and Means Resolution which we passed imposed the new rate of duty in the ordinary way from the moment at which the Resolution was passed. It is a necessary part of our procedure that all new duties should be made to operate immediately so as to prevent forestalling, and quite plainly it could and would have been forestalling if we had adopted the procedure which is suggested in the Amendment. All the holders of licences would have been able, as they are entitled, to surrender their licences. They then could have taken out new licences for a full year period at the old rate. As a result, anybody who was astute and quick enough to do so could have escaped the new rate of duty for a period of 11 months. Quite clearly this is something that we could not contemplate.

The consequence is that those people who had deferred renewing their licences until after 6 April had to pay the higher rate of duty. As I say, there is no injustice here. They deferred taking out their licence until a time when the rate for that licence had gone up.

First of all, let me stress, as the right hon. Gentleman pointed out, that the so-called grace period of 14 days has now statutory basis at all. Indeed, most hon. Members will have seen a report in the newspapers recently of a case in which this was quite clearly established in the courts. It was shown that someone had committed a criminal offence by driving without a licence during the grace period. I think that much of the fallacy in the argument derives from the thought that when a licence is issued during the grace period it operates as from the first day of the month. It does not. It operates from the first day on which it is issued. It is only an authority to the user from that date. It is correct, as the right hon. Gentleman pointed out, that whatever date during a month a licence is taken out, the rate for the whole month has to be paid. But the licence itself operates only from the date of issue.

The position is exactly the same as anyone who failed to anticipate any other Budget change. One knows of people who were stocking up with whisky before the Budget in anticipation that there might be an increase in the duty. Those who did no doubt congratulated themselves and those who did not, and who were whisky drinkers, regretted it. But I do not think they went around smarting under a great sense of injustice against my right hon. Friend. The position is the same for those people who chose to defer renewing their licences until after Budget day. They ran a risk, but there is no implication that the "grace period" carries with it a guarantee that the Chancellor is not going to alter the rate of duty during the period and an awful lot of gentlemen——

Mr. Gower

Would the hon. and learned Gentleman admit that, by the kind forbearance of the authorities, people have been allowed these days of grace? In effect, the person who pays on the fourteenth of those days of grace is paying the same annual licence duty as the person who pays on the first day and to this extent is there not a distinction to be drawn?

Mr. MacDermot

The answer is no, he is not, if during those 14 days the Chancellor has changed the rate. That is a risk which he runs in taking advantage of the grace period to defer his payment and his renewal until a time when the rates may have been altered. It is surely common knowledge when Budget day is, and anyone renewing his licence must realise that if he fails to renew during those six days he is running the risk that the licence fee may be increased. Equally, of course, he might calculate the other way and think that perhaps the licence fee will be reduced.—[Interruption.] I invite hon. Gentleman to pursue the logic of their argument. One can contemplate situations in which these licences are reduced and if they are reduced and someone defers taking out their licence until after the reduction, is he not going to smart under a great sense of injustice and say, "I correctly deferred taking out my licence and now I have to pay at the old higher rate"? It is quite illogical and mistaken to associate and identify the grace period with the rate of duty.

Mr. Keith Stainton (Sudbury and Woodbridge)

Would not the hon. and learned Gentleman agree that both the application form and the motor vehicle registration book refer to the 14 days' grace? The hon. and learned Gentleman referred to a case tried in the courts recently where a man exceeding the 14 days' grace was fined £2. Is it not a fact that people applying after 6th April for renewal on 3rd April are in effect being fined £2 10s., without trial?

Mr. MacDermot

They are not being fined at all. All that is happening is that they are being charged the new rate of duty which was imposed. They are not being fined any more than the unfortunate who deferred purchasing his bottle of whisky until after 6th April. He would not be fined by the increase in the duty which he had to pay. He may have disliked it and he may have failed to anticipate it.

Mr. Costain

The hon. and learned Gentleman has made a very important point in saying that the licence taken out on the 14th is effective only on the 14th. Is he not aware that a vehicle which is not licensed is not insured? Is he implying that for the first 14 days that vehicle was criminally not insured?

Mr. MacDermot

It is not a question of insurance but of the road vehicle licence.

Sir D. Glover

This is not a party point but an important point which applies equally to my party when in Government. If the 14 days' grace is a 14 days' grace which has not effect in law and the person who takes out his licence on the 14th of the month is, from the point of view of the licensing of the vehicle, not covered from the 1st to the 14th, is not the State extracting from him 14 days of tax for a period when he was not covered by law? Is not that dishonest on the part of the State?

Mr. MacDermot

All that the 14 days' period means is that the State says in effect, "Provided you renew within 14 days of the end of the month we will not proceed against you for the fact that you may have driven the vehicle before the renewal". This is what the 14 days' grace period is and remains. This is not altered in the slightest. It has nothing whatever to do with the rate of duty. It is not an offer that, "If you renew within 14 days we will allow you to renew at the rate which was laid down for the previous month or before the new Budget."

Sir D. Glover

I am not arguing about the rate of duty. I was asking whether in law from the 1st to the 14th the vehicle was covered, that is, was licensed. The hon. and learned Gentleman is now saying that the owner is covered only from the day on which he takes out the licence.

Mr. MacDermot

That is the legal position in law and if the hon. Gentleman—he not being bound by the grace period—were to choose himself to take out a private prosecution against one of his hon. Friends, which I am sure he would not do, for having driven a car during the 14 days' period unlicensed, as I understand the law, the court would be bound to convict his hon. Friend. The court might give him an absolute discharge and think that the hon. Gentleman had been wasting the time of the court, but that is the legal position. The grace period means that as far as the State is concerned we would not prosecute in those circumstances, provided that a licence is taken out.

Mr. Maxwell-Hyslop

Nonsense.

Mr. MacDermot

I will give way to the hon. Gentleman's courteously worded intervention.

Mr. Maxwell-Hyslop

It is not the State that prosecutes. It is the county authority. I am not aware that the Crown prosecutes in these cases. Surely the person concerned would be prosecuted by the local licensing authority and not the State. Therefore, the State cannot give an undertaking that a county authority or a borough authority will not prosecute.

Mr. MacDermot

The point is that there is a happy understanding between the police authorities, the local authorities and the Ministry of Transport in these matters and I think that hon. Members understood what I meant by "the State".

The right hon. Member for Wolverhampton, South-West, referred to the fact that we had made an extra-statutory concession in this matter. That is quite right and I hope that the Committee will agree that it was a proper thing to do. The extent of it was that if people had properly applied for a licence before Budget day and the licence had not been issued—and of course in many cases people apply by post—although this was not strictly covered by the Ways and Means Resolution we thought it right to grant an extra-statutory concession and allow the licence to be renewed at the old rate. Because it was an extra-statutory concession it was announced to the House by my right hon. Friend the Minister of Transport.

10.15 p.m.

Finally, there is no grace period in respect of new vehicles. There would be no reason what ever to refrain from imposing the new rate of duty on any vehicle being registered for the first time after Budget day. It would be a very curious situation if two vehicles were both licensed on the same day for the same period and there were two rates of duty according to whether it was a licence for a new vehicle or it was a renewal of an old licence. If one did not apply it to all vehicles, as I pointed out, this could be used for forestalling, and if one did apply it only to new vehicles it would operate unfairly in the way I indicated.

The crux of the matter is that any increase in duty must come into force at a given point of time. Always, people who happen to fall one side of the line or the other feel that it is at least unfortunate or, in some cases, an injustice if they are caught. The existence of the so-called grace period for renewing licences has no relevance to this matter and has quite erroneously led people to feel that they were suffering an injustice.

Sir A. V. Harvey

The hon. and learned Gentleman is trying to get the best of all worlds because he said that a man who stocked up whisky before Budget day was lucky but a man who did not was unlucky, ignoring the fact that there is no 14 days' grace period for the man who wants to stock up whisky. In logic, the hon. and learned Gentleman should scrub out the 14 days completely so that the public know exactly where they stand. It is a fraud.

Mr. Ronald Bell (Buckinghamshire, South)

The Financial Secretary has given us a very disappointing and illogical answer. He has already had his attention drawn to what is printed on the log book. I must say that, in view of what is printed there, I was a little surprised that the prosecution took place. However, that is another matter. The inscription on the log book is a notification to the public that they have a period of 28 days, 14 before and 14 after, in which to take out a licence.

Is the hon. and learned Gentleman aware that the application form which is used in applying for an excise licence has on it a formula to the effect that the applicant has not used the motor vehicle on the public road before applying for the licence, there being a note underneath that that paragraph should be struck out if the application is for a licence starting immediately after the expiration of the previous one. Thus, upon the form, a statutory form on which a prosecution could be based, there is a direct indication that a person can apply after, say, ten days. He can cross out that item and say, in effect, "Yes, I have been using my car for the previous ten days and I apply for the licence to be renewed as from the first day of the period for which I wanted a new licence, which began ten days ago". That is what the form tells him. In the circumstances, I find it a little difficult to understand what the hon. and learned Gentleman was saying about the period of grace having no bearing on the argument which my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) advanced.

The Financial Secretary should remember that the 14 days' grace period is not entirely for the benefit of the motorist. If the issuing offices—the county boroughs and county councils—had to issue all the licences within the 14 days preceding the date on which renewal was due, they could not do it. This arrangement of having 14 days before and 14 days after is a necessary administrative arrangement to cope with the rush of renewals at these fixed times. This being so, it being for the convenience of the administration as for the convenience of the subject, the hon. and learned Gentleman has no moral justification for the line which he is taking.

My final question is this. Does the speech which he has just made amount to a formal and explicit repudiation by him of the arguments used by his right hon. Friend on the occasion referred to by my right hon. Friend when exactly the opposite was said?

Mr. Geoffrey Hirst (Shipley)

I am sorry to intervene because I am not anxious to prolong the discussion. [HON. MEMBERS: "Why not?] Because there is a lot of important business in which I am interested. But nevertheless this is an occasion which must be marked. If progress in a big Bill like this is to be made, then right hon. and hon. Members opposite must realise that they cannot ruffle opinion so unjustifiably as they have done here tonight.

Mr. MacDermot

Oh.

Mr. Hirst

I am speaking for a very large volume of opinion in the country. The hon. and learned Gentleman cannot treat the Committee or the public at large in this way. I have every respect for him and I do not think that he means it, but it is nothing more than impertinence to suggest that because they are not backdating the licence fee for people who already had a letter in the post for the licence the Government are handing out a concession. That is impertinence and unacceptable to this side of the Committee. I feel very strongly about this. The Government cannot treat people in this manner and expect co-operation from this side of the Committee if they are to make that sort of statement.

I do not question the legalistic argument about a concession, but the British public have considered this 14-day period as a concession. It has been respected and used with great wisdom to the mutual advantage of the authorities and the public. The public have accepted it in good faith and they have believed and had every reason to believe, that when they posted their applications or were about to do so this trick would not be played upon them. [HON. MEMBERS: "0h."] Yes, trick.

The public had every reason to believe that, provided they signed their licence application within the period, it would be in order. That is a sensible and reasonable attitude, whatever the legalistic argument. I have no interest beyond these two points. I express them strongly because I feel them strongly. If hon. Members opposite are to treat the Committee in that way they will have hell in the process of the Bill.

Mr. Powell

I believe that the Committee wishes to make progress, but in view of the surprising attitude of the Government progress can only be made by dividing. The hon. and learned Gentleman reduced his argument to bathos by seeking an analogy with those stocking up with whisky. If that is the best argument he can produce for this, then the whole thing is in ruins, for what analogy can there be between stocking up with whisky and carrying out an act which one is required by law to carry out and which one is allowed by public concession to carry out at any point of time within a period of 14 plus 14 days?

The very fact that the hon. and learned Gentleman should produce such an argu- ment reveals a sense of guilt and shows the vindictiveness of the proposal. If he accepts the Amendment, there is no possibility of forestalling. No one can forestall at this moment of time if the Amendment is accepted. If at any future time—it will not, of course, be under a Labour Government—these duties are reduced, then the same argument of fairness as between those entitled to take out their licences in a period would equally apply. I therefore ask those who regard this position as wholly unacceptable to divide in favour of the Amendment.

Sir D. Glover

I do not propose to delay the Committee more than a moment. [HON. MEMBERS: "Why not?"] But being a cautious individual I have in my pocket an application for a renewal of a motor vehicle licence. The Government's case is shot completely down because it is stated on the reverse page: Application is made within the period from 14 days before to 14 days after the expiration of the previous licence. This, I understand and I have always thought, is a statutory form with the authority of the Government behind it. I have filled it in over many years, usually out of date, I might say, but whatever I have done I have always thought that it had the authority of the State behind it in stating that I had 14 days' grace in which to renew my licence.

The Government are abrogating that form. They can give as many arguments as they like. This is not a form for which, as a result of a Tory Government, one has to apply. It is sent when one renews one's licence. That is why I have it. This copy is for next year. It tells me that I have 14 days after the expiration of my licence in which to renew it, presumably on the same terms as those on which I had it before.

The Financial Secretary is saying that the Government have a white-sheet case for making an alteration and that this form which has been sent to me, which has been in my possession for some months and will, presumably, remain in my possession until I renew my licence next time, is not valid and that what is stated on the form has no validity.

Mr. MacDermot

There is no withdrawal of the concession. It is perfectly valid. The 14-day concession remains.

Question put, That "6th" stand part of the Clause:—

The Committee divided: Ayes 174, Noes 153.

Division No. 119.]	AYES	[10.28 p.m.
Abse, Leo	Galpern, Sir Myer	Oswald, Thomas
Allaun, Frank (Salford, E.)	George Lady Megan Lloyd	Owen, Will
Aldritt, Walter	Gourlay, Harry	Paget, R. T.
Armstrong, Ernest	Gregory, Arnold	Pearson, Arthur (Pontypridd)
Bacon, Miss Alice	Grey, Charles	Peart, Rt. Hn. Fred
Barnett, Joel	Griffiths, David (Rother Valley)	Pentland, Norman
Baxter, William	Griffiths, Will (M'chester, Exchange)	Popplewell, Ernest
Bellenger, Rt. Hn. F. J.	Hamilton, James (Bothwell)	Price, J. T. (Westhoughton)
Bence, Cyril	Hannan, William	Probert, Arthur
Bennett, J. (Glasgow, Bridgeton)	Harper, Joseph	Rees, Merlyn
Binns, John	Harrison, Walter (Wakefield)	Rhodes, Geoffrey
Bishop, E. S.	Hart, Mrs. Judith	Roberts, Albert (Normanton)
Blenkinsop, Arthur	Hattersley, Roy	Roberts, Goronwy (Caernarvon)
Boardman, H.	Heffer, Eric S.	Robertson, John (Paisley)
Bowden, Rt. Hn. H. w. (Leics S.W.)	Herbison, Rt. Hn. Margaret	Rodgers, William (Stockton)
Bowen, Roderic (Cardigan)	Hill, J. (Midlothian)	Rogers, George (Kensington, N.)
Boyden, James	Holman, Percy	Rose, Paul B.
Braddock, Mrs. E. M.	Hooson, H. E.	Ross, Rt. Hn. William
Bradley, Tom	Horner, John	Rowland, Christopher
Bray, Dr. Jeremy	Howarth, Robert L. (Bolton, E.)	Sheldon, Robert
Brown, Hugh D. (Glasgow, Provan)	Howie, W.	Short,Rt.Hn.E.(N'c'tle-on-Tyne,C.)
Brown, R. W. (Shoreditch & Fbury)	Hoy, James	Silkin, John (Deptford)
Buchan, Richard	Hunter, Adam (Dunfermline)	Silverman, Julius (Aston)
Callaghan, Rt. Hn. James	Irvine, A. J. (Edge Hill)	Silverman, Sydney (Nelson)
Carmichael, Neil	Jay, Rt. Hn. Douglas	Slater, Mrs. Harriet (Stoke, N.)
Carter-Jones, Lewis	Jeger, George (Goole)	Slater, Joseph (Sedgefield)
Castle, Rt. Hn. Barbara	Jenkins, Hugh (Putney)	Small, William
Chapman, Donald	Johnston, Russell (Inverness)	Snow, Julian
Coleman, Donald	Jones, Dan (Burnley)	Soskice, Rt. Hn. Sir Frank
Conlan, Bernard	Jones, J. Idwal (Wrexham)	Steel, David (Roxburgh)
Cousins, Rt. Hn. Frank	Jones, T. W. (Merioneth)	Steele, Thomas (Dumbartonshire,W.)
Craddock, George (Bradford, S.)	Kenyon, Clifford	Stones, William
Crawshaw, Richard	Kerr, Mrs. Anne (R'ter & Chatham)	Swain, Thomas
Crosland, Anthony	Lawson, George	Swingier, Stephen
Cullen, Mrs. Alice	Lee, Rt. Hn. Frederick (Newton)	Taylor, Bernard (Mansfield)
Dalyell, Tam	Lewis, Ron (Carlisle)	Thomas, George (Cardiff, W.)
Davies, G. Elfed (Rhondda, E.)	Lubbock, Eric	Thornton, Ernest
Davies, Harold (Leek)	Mabon, Dr. J. Dickson	Tinn, James
Davies, S. O. (Merthyr)	MacDermot, Niall	Tomney, Frank
de Freitas, Sir Geoffrey	Mclnnes, James	Varley, Eric G.
Delargy, Hugh	Mackenzie, Gregor (Rutherglen)	Wainwright, Edwin
Dell, Edmund	Mackie, George Y. (C'ness & S'land)	Walden, Brian (All Saints)
Dempsey, James	MacMillan, Malcolm	Walker, Harold (Doncaster)
Diamond, John	MacPherson, Malcolm	Wallace, George
Doig, Peter	Mahon, Peter (Preston, S.)	White, Mrs. Eirene
Donnelly, Desmond	Mahon, Simon (Bootle)	Wigg, Rt. Hn. George
Duffy, Dr. A. E. P.	Mallalieu,J.P.W.(Huddersfield,E.)	Willey, Rt. Hn. Frederick
Dunn, James A.	Mapp, Charles	Williams, Alan (Swansea, W.)
Edelman, Maurice	Mendelson, J. J.	Williams, Albert (Abertillery)
Edwards, Rt. Hn. Ness (Caerphilly)	Miller, Dr. M. S.	Willis, George (Edinburgh, E.)
Evans, loan (Birmingham, Yardley)	Milne, Edward (Blyth	Wilson, Rt. Hn. Harold (Huyton)
Fernyhough, E.	Monslow, Walter	Wilson, William (Coventry, S.)
Finch, Harold (Bedwellty)	Morris, John (Aberavon)	Woodburn, Rt. Hn. A.
Fitch, Alan (Wigan)	Neal, Harold	Woof, Robert
Fletcher, Sir Eric (Islington, E.)	Noel-Baker, Francis (Swindon)	Yates, Victor (Ladywood)
Fletcher, Ted (Darlington)	Oakes, Gordon
Floud, Bernard	O'Malley, Brian	TELLERS FOR THE AYES:
Foot, Sir Dingle (Ipswich)	Oram, Albert E. (E. Ham, S.)	Mr. John McCann and
Fraser, Rt. Hn. Tom (Hamilton)	Orme, Stanley	Mr. Ifor Davies.
Freeson, Reginald
NOES
Agnew, Commander Sir Peter	Birch, Rt. Hn. Nigel	Clark, William (Nottingham. S.)
Alison, Michael (Barkston Ash)	Black, Sir Cyril	Cole, Norman
Allason, James (Hemel Hempstead)	Bossom, Hn. Clive	Cooke, Robert
Anstruther-Cray, Rt. Hn. Sir W.	Box, Donald	Cooper-Key, Sir Neill
Astor, John	Boyd-Carpenter, Rt. Hn. J.	Certain, A. P.
Awdry, Daniel	Brinton, Sir Tatton	Crosthwaite-Eyre, Col. Sir Oliver
Baker, W. H. K.	Bromley-Davenport,Lt.-Col.SirWalter	Curran, Charles
Barlow, Sir John	Brown, Sir Edward (Bath)	Currie, G. B. H.
Batsford, Brian	Bruce-Gardyne, J.	Davies, Dr. Wyndham (Perry Barr)
Beamish, Col. Sir Tufton	Buchanan-Smith, Alick	d'Avigdor-Goldsmid, Sir Henry
Bell, Ronald	Buxton, Ronald	Dean, Paul
Bennett, Sir Frederic (Torquay)	Carlisle, Mark	Deedes, Rt. Hn. W. F.
Berry, Hn. Anthony	Cary, Sir Robert	Digby, Simon Wingfield
Biggs-Davison, John	Clark, Henry (Antrim, N.)	Dodds-Parker, Douglas
Douglas-Horne, Rt. Hn. Sir Alec	Irvine, Bryant Godman (Rye)	Pounder, Ration
Eden, Sir John	Jenkin, Patrick (Woodford)	Powell, Rt. Hn. J. Enoch
Elliott, R. W. (N'c'tle-upon-Tyne,N.)	Johnson Smith, G. (East Grinstead)	Price, David (Eastleigh)
Errington, Sir Eric	Jopling, Michael	Pym, Francis
Eyre, Reginald	Joseph, Rt. Hn. Sir Keith	Redmayne, Rt. Hn. Sir Martin
Fisher, Nigel	Kerby, Capt. Henry	Ridley, Hn. Nicholas
Fletcher-Cooke, Charles (Darwen)	Kerr, Sir Hamilton (Cambridge)	Ridsdale, Julian
Fletcher-Cooke, Sir John (S'pton)	Kershaw, Anthony	Roots, William
Foster, Sir John	King, Evelyn (Dorset, S.)	St. John-Stevas, Norman
Fraser, Ian (Plymouth, Sutton)	Kirk, Peter	Scott-Hopkins, James
Gammans, Lady	Kitson, Timothy	Sharples, Richard
Gilmour, Ian (Norfolk, Central)	Lewis, Kenneth (Rutland)	Sinclair, Sir George
Gilmour, sir John (East Fife)	Litchfield, Capt. John	Stainton, Keith
Glover, Sir Douglas	Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)	Stanley, Hn. Richard
Godber, Rt. Hn. J. B.	Longbottom, Charles	Stoddart-Scott, Col. Sir Malcolm
Goodhew, Victor	MacArthur, Ian	Studholme, Sir Henry
Gower, Raymond	Macleod, Rt. Hn. Iain	Summers, Sir Spencer
Gresham-Cooke, R.	Maginnis, John E.	Taylor, Sir Charles (Eastbourne)
Grieve, Percy	Maitland, Sir John	Taylor, Edward M. (G'gow,Cathcart)
Griffiths, Peter (Smethwick)	Maude, Angus	Temple, John M.
Gurden, Harold	Mawby, Ray	Thatcher, Mrs. Margaret
Hall, John (Wycombe)	Maxwell-Hyslop, R. J.	Thomas, Rt. Hn. Peter (Conway)
Hall-Davis, A. G. F.	Maydon, Lt.-Cmdr. S. L. C.	Thompson, Sir Richard (Croydon,S.)
Hamilton, M. (Salisbury)	Mills, Peter (Torrington)	van Straubenzee, W. R.
Harvey, Sir Arthur Vere (Macclesf'd)	Miscampbell, Norman	Vaughan-Morgan, Rt. Hn. Sir John
Harvie Anderson, Miss	Mitchell, David	Walker, Peter (Worcester)
Heald, Rt. Hn. Sir Lionel	Monro, Hector	Ward, Dame Irene
Heath, Rt. Hn. Edward	More, Jasper	Weatherill, Bernard
Higgins, Terence L.	Morrison, Charles (Devizes)	Webster, David
Hiley, Joseph	Murton, Oscar	Whitelaw, William
Hill, J. E. B. (S. Norfolk)	Nicholson, Sir Godfrey	Williams, Sir Rolf Dudley (Exeter)
Hirst, Geoffrey	Nugent, Rt. Hn. Sir Richard	Wilson, Geoffrey (Truro)
Hobson, Rt. Hn. Sir John	Osborn, John (Hallam)	Wise, A. R.
Hordern, Peter	Page, John (Harrow, W.)	Younger, Hn. George
Hornby, Richard	Page, R. Graham (Crosby)
Hornsby-Smith, Rt. Hn. Dame P.	Pearson, Sir Frank (Clitheroe)	TELLERS FOR THE NOES:
Howe, Geof[...]rey (Bebington)	Percival, Ian	Mr. Martin McLaren and
Hutchison, Michael Clark	Pitt, Dame Edith	Mr. Dudley Smith.
Iremonger, T. L.

Question proposed, That the Clause stand part of the Bill.

Mr. Webster

Having listened to the debate on every part of this Clause, I would describe it as inflationary, doctrinaire, retrograde, and, after the last Amendment and the way in which it was dealt with by the Financial Secretary, mean and stupid. It is clearly inflationary, and we are today in the presence of the biggest rise in the cost of living index for the last 10 years.

We have been told at every step, and at every change of Government policy, that what they are doing is not inflationary, but the fact is that 83 per cent. of all the goods moved in this country are moved by commercial vehicles. When the price of petrol was increased by 6d. a gallon last November I was standing close to the Bar of the House and I heard screams of delight and shouts of, "Get the stuff back to the railways", regardless of whether it pays or not. This is the doctrinaire attitude with which we are faced today.

The industry is faced with finding additional costs of £100 million. We know that the Government benches are anti-road user, and opposed to the use of the roads. They wish to use the railways, at any expense. They have behind them powerful trade unions and vested interests which are all the time pressing for goods to be moved by rail.

We have not seen the First Secretary of State here today. He does not appear to have been consulted about the duty on beer, the Excise Duty on Scotch, or about the increase proposed here, yet lie is naive enough to ask industry why it considers it necessary to increase its prices. This attitude simply beggars description.

That this is a doctrinaire attitude is proved by the fact that this provision anticipates the publication of the Geddes Report which was to deal with every aspect of the problem. I am sure that the country would like to see hon. Gentleman below the Gangway on television, and note how they are laughing at this matter. The Report has gone in great detail into every aspect of our licensing system, and now it is being anticipated by the swingeing increase in commercial vehicle taxation.

That brings me to what was said by the Prime Minister, who graced us with his company at one stage of our proceedings today. About two years ago, in America, he said, when interviewed on television and asked what he would do about nationalising the road haulage industry, that he was not going to take over "every little back-street garage" and every little run-down unit in the industry at big compensation prices. What he was going to do was to take the lid off the B.R.S. The Government are also going to put on various other forms of discriminatory tax, and this is one of them. We can see the prediction coming true today.

I have here a list of the numbers of bankruptcies in the industry. In 1962 it had the second highest number of bankruptcies of any industry; in 1963 it had the fourth highest, and there are many people in this industry who are working on very small margins. The Prime Minister knew quite well what he was saying, and the Chancellor knows quite well what he is doing when he puts an extra burden on the industry. At the same time the Minister of Transport has the bare face to say to the industry, "Please do not pass on these extra prices to the community until next month, while we consider the problem."

Let us compare the difference in efficiency and the passing on of costs between the B.R.S. and the privately-owned sector of the industry. In 1950 B.R.S. put up its prices by 7½ per cent.; in 1951 by 12 per cent., and in 1952 by 12½ per cent. and that meant a rise of over 30 per cent. over three years. In 1965 the private sector of the road haulage industry is still costing 5 per cent. below what the B.R.S. was charging 11 years ago, despite the addition of 58 per cent. in wages during this period. This is the sector of the industry which is being asked to sustain and contain increases in duties and costs.

In transport debates we are frequently addressed by hon. Members who represent railway workshop towns. I think of one father and son, both renowned Members, who represent Derby, South (Mr. Philip Noel-Baker) and Swindon (Mr. Francis Noel-Baker). [HON. MEMBERS: "Where are they?"] I do not know where they are today. But they should know that they not only represent railway workers; they represent a vast number of workers in the motor industry, in the Pressed Steel Company and the Rolls-Royce Company. They should be less doctrinaire and should look after the interests of our major exporting industries. The industry needs a firm base, both on the commercial side, in the road haulage industry, and in the private car sector.

We know that the Government are having a little trouble about nationalisation. There is a little to-ing and fro-ing. We do not know what their intentions are. We do not know whether they will proceed with the Steel Bill or let it drop. What we do know is that there is no fear of their bringing in a Bill to nationalise the road haulage industry——

The Deputy-Chairman

Order. The hon. Member must not deal with nationalisation on this Clause.

Mr. Webster

I thank you, Sir Samuel. Their purpose would be to put increasing charges on the industry, as they have done by National Insurance contributions, by the 6d. on the gallon of petrol and by immense increases in Excise Duty. At the same time they are trying to induce the industry not to pass on these taxes. There will be gradual bankruptcy in the industry, and it will be gradually taken over by the B.R.S., which is having the load taken off it. This is nationalisation by the back door. That is what the Clause is about, and that is why I, for one, will oppose it.

10.45 p.m.

Mr. Patrick Jenkin (Wanstead and Woodford)

I should like to add my word of opposition to the Clause. I am sorry that the Minister of Transport has not thought it right to listen to the debate. I see the Joint Parliamentary Secretary skulking down at the other end of the Treasury Bench; no doubt he will take note of what is said. He is trying to hide behind the Paymaster-General. I cannot see the Minister of Transport here because he is not yet in the Committee.

I attack this Clause and particularly the increases in duty on goods vehicles.

It is premature, even if it were justified, and it is totally indiscriminatory. Most serious of all, it is prejudicial to the very serious investigation which I hope is being carried out by Lord Hinton and his advisory committee into the difficult and technical problem of track costs. This is something which has come into the open in the last six or nine months, as containing the key to the road-rail conflict, the key to the proper basis of competition between road transport and rail transport. The essence of the problem is to make sure that both forms of transport know their true track costs, their costs on what is known as the substratum of their operations.

This, as my hon. Friend the Member for Weston-super-Mare (Mr. Webster) said, has come out in the evidence given by many bodies and individuals to the Geddes Committee. We are told that this Committee has reported, and we await the publication of its report with great interest. This is a subject on which it will have pronounced. It is certainly a subject which was referred to Lord Hinton in the statement made by the Minister of Transport when he announced the co-ordinating functions to be performed by the noble Lord. Perhaps the most frightening statement on this came from Dr. Beeching, in his evidence to the Geddes Committee on comparative road and rail track costs.

I am prepared to believe that there is a great deal in what Dr. Beeching said, but the important thing to recognise is that it is inevitably selective to say that the heavy lorry is not paying its true share and that it ought to pay more in taxation. This applies only to the long-distance heavy lorry going on trunk roads. This is where there is true competition between long-distance road transport and rail transport. This is a problem which has to be determined scientifically on the basis of the evidence and the facts, and on proper allocation of road costs.

My objection to the Clause is that it sweeps aside all this argument and totally ignores the great deal of work which has been done in the Ministry of Transport, by British Railways and the Transport Holding Company and other bodies in trying to arrive at the truth of this difficult problem. This Clause and its swingeing increases in taxation, indiscriminately affecting the large as well as the small, entirely prejudges the issue. Of course, this is bound to put up the cost of living.

I have here the Annual Reports of the Licensing Authorities, covering the twelve months up to 30th September, 1964. These reports make it clear that, inevitably, as the railways are rationalised, as lines which can never pay and are only partially used are closed down—as the vast majority of people recognise that they must be—this traffic will go on to the roads. The licensing authorities for England and Wales are now faced with applications for contract aid and B licences to carry traffic which was hitherto carried by rail. I have here the annual report of the licensing authority for the Yorkshire area. It refers to the fact that some of the fish traffic from Hull will have to be carried by rail. Applications for licences included an application for a new B licence to authorise 91 rigid vehicles and 45 articulated vehicles.

This is a very big application indeed. One shudders to think of the extra cost which this places on the hauliers who undertake this vital function of moving fish about the country. It will cost him thousands and thousands of pounds extra, and it is bound to put up the cost of fish to the housewife. In the report of the licensing authority for the East Midland Traffic Area, the closure of railway yards is given as a reason for the increased operation of road vehicles for the movement of coal traffic. There is reference to concentration in new coal depots, as we have seen around London, for example, at West Drayton. This is bound to lead to the increased movement of coal by road in the interests of economy—but then the economy is swept away by the substantial tax increases which the Bill seeks to make.

I will not weary the Committee by giving other examples. [HON. MEMBERS: "Go on."] I am grateful to my right hon. and hon. Friends for their interest. This increase in taxation is calculated to defeat the objectives of the Minister of Transport. [HON. MEMBERS: "Where is he?"] The Minister of Transport, who is standing beyond the Bar, knows that he is not in the Chamber. He has set himself a task of achieving co-ordination between road and rail on the basis of ensuring that each form of transport bears its proper costs. It may seem ironic that the Socialist Government are working on a system which is relevant only if one believes in coordination by competition. Of course, if one believes in co-ordination by direction and integration, then it is not necessary to bother about these costs; if one is to direct the traffic to the rail, it does not much matter how much of the true track costs different forms of transport bear.

But if we recognise that track costs are an important factor and that it is important to determine the true track costs to make sure that road transport bears its proper share, it is nonsense to prejudge the whole issue by adding this enormous increase to the cost of road vehicle licences, destroying the whole foundation of the co-ordination work which is going on. This is a classic example of the Government's left hand not knowing what the right hand is doing. I cannot believe that the Minister of Transport and his advisers have agreed to the increased tax if they are serious in what they say about the need for coordination. One may be led to the conclusion that they are not serious and that this is merely a front to persuade the various interests concerned that this is a genuine exercise in co-ordination in which they should be encouraged to cooperate. I very much hope that if we have an opportunity to divide on this issue we shall vote against the Clause.

Mr. Robert Cooke (Bristol, West)

I am glad to rise at this stage to oppose this Clause. I am glad that my hon. Friend the Member for Weston-super-Mare (Mr. Webster) gave the Committee such welcome detail and made out such a good case against the inflationary effects of the Clause. He can hardly claim to represent a great industrial area—I am sorry if my hon. Friend seems upset by that—but his chief industry is tourism.—[HON. MEMBERS: "Toryism?"]—Toryism and tourism; and perhaps transport looms very large in my hon. Friend's considerations so perhaps I have done him an injustice.

That brings me to the City of Bristol, part of which I have the privilege to represent, and the industrial considerations there. There is no doubt about it that the provisions of this Clause will greatly increase the costs of transport and the cost of sending out goods produced in the City of Bristol, and goods coming in from all over the West Country. It is no good hon. Members opposite asserting their preference for rail over road. Although we have some quite good through railway routes in the West Country, we certainly have not got a very elaborate road system.

The previous Government made some good plans in this direction, and I hope that the present Government will press on with them. But this Clause will make it very difficult to travel over these roads even if we get them. Such grandiose provisions for increases in road taxation should lead to some of this money being spent on roads for those who are paying these taxes.

We have seen a grand bridge built across the harbour, which has been closed for most of the time since it was opened by the Minister of Transport, and the City of Bristol did not think much of that, as they did not think much of the increases in road taxation.

I will not go in great detail over all the grave injustices contained in this Clause, because my hon. Friends have gone over them in some detail and put forward many probing Amendments of one kind or another. I thought that the hon. Member for Tiverton (Mr. Maxwell-Hyslop) let the hon. Gentleman off pretty lightly, when he was speaking about the two-wheeled bicycle without an engine, by not going wider to speak about the three-wheeled vehicle without an engine, about which I reckon the Government have absolutely no answer at all.

To conclude, we are told, and we agree in the West Country, that the key to all our problems is communications—road communications. A brave start was made by the previous Government, not apparently to be carried on with much energy by the present administration. Over these roads, road vehicles will have to move, but the present Government by their proposals in this Clause have done all they can to make it more difficult and more expensive to move over them.

It is, therefore, as a Member for the City of Bristol, which I would describe as the reluctant capital of the West Country on which the whole future of the area depends, linked with various parts of the West Country by an inadequate road system which we hope to see improved, doing our best to make the economic progress of the West Country a success, that I say we are hampered by this Clause.

No Member for a great industrial city, capital of a far-flung area, one of the most distant regions of the United Kingdom, can possibly support the provisions of this Clause for prodigious increases in road vehicle taxation which will make it even more difficult to do an extremely difficult job.

Mr. Goodhew

After some seven hours debating Amendments designed to save the people of this country from some of these swingeing increases in taxation, during which most of the time we have been blessed by perhaps one sleeping Member on the Government side of the House, it is encouraging to see a round dozen of back benchers now interesting themselves in this Clause.

It is nevertheless very disappointing to find that every time an hon. Member on this side resumes his seat there is no one on that side anxious to stand up and speak.

Mr. Swain

The hon. Gentleman criticises Government back benchers for not being present. But when he goes to the pictures and there is a bad picture, does he sit on to the end?

11.0 p.m.

Mr. Goodhew

The hon. Gentleman complains because he has had to sit through a bad picture. Is he not aware that this bad picture was produced by his party? If he cannot bear to sit through it he should blame his colleagues, not us.

Any hon. Member who has sat through the discussion of the last seven hours must agree that everything that has been said—and most of what has been said has come from this side of the Committee—shows that my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) was right when he said that the only reason one can possibly find for the Clause is prejudice.

We have this heavy Finance Bill—this enormity of increased taxation—because the Government are so blinded by prejudice that they cannot see the cause and effect in economic terms. They can take week-end courses and what they will, but the fact remains that they are so prejudiced against the Swiss bankers that they cannot understand why, when they refer to them as the "gnomes of Zurich", those bankers react against them. They are so prejudiced against the City that when they make nasty noises about it they are surprised that the City should react badly against their policies.

They are prejudiced against private enterprise, shareholders and speculators. They do not understand that the prosperity which they inherited—[Interruption] and they talked with pride about it earlier—resulted from the activities of the various sections of the community against whom they are so prejudiced. And then, when we consider the Clause, we find that they are prejudiced not only against all those things, but also against the private car owner, the motor cyclist, the motor scooter owner and even against the poor Mods and Rockers.

Several Hon. Members rose——

Mr. Goodhew

How can they imagine that a Government of this sort have any promising ideas to put forward when hon. and right hon. Gentlemen opposite are so obviously blinded by prejudice against so many sections of the community and when they keep on producing measures which only make matters worse? They are like the clown in the circus who——

Mr. Swain

On a point of order. Although we are listening to the best speech that has been made 10 times today, has it got anything to do with the Clause?

The Temporary Chairman (Sir H. Legge-Bourke)

If the hon. Gentleman had been out of order he would have been called to order.

Mr. Goodhew

Had the hon. Member for Derbyshire, North-East (Mr. Swain) been here a little longer he would have heard some other excellent speeches from my hon. Friends.

As I was saying, it is surprising that the Government can go on making the same mistakes time and again, just as they are doing in the Clause. They are adding to the cost of our goods and products. I see the Paymaster-General having a seizure. What does he find amusing in all this? Is it funny that the costs of production and of delivering goods are being increased by his Government? It all goes to show that they are behaving like the clown at the circus who, every time a custard pie is thrown in his face, wipes it off and shows great surprise when the next pie hits him. The Government keep on making the same stupid mistakes. I wish they would stop looking so surprised.

Mr. David Mitchell (Basingstoke)

We have heard some stirring speeches from the Prime Minister calling for the Dunkirk spirit to boost Britain's exports. Considering that the most pressing need, if we are to increase our exports, is for British industry to be competitive, there is something contradictory in the Government introducing a Clause of this sort now. Road transport enters into all costs—costs of manufacture, costs of exporting, and so on—and no matter how much we push goods on to the railways the fact is that most factories are not on the railway line. Even if goods are taken in part by rail they usually have to finish their journey by road, and they usually have to go by road to the docks for export.

These proposals will lead to increases in road transport costs. My hon. Friend the Member for Weston-super-Mare (Mr. Webster) has already spoken of British Road Services, and I have recently had through the post a communication that I find most interesting. It is from British Road Services Parcels Ltd. It is dated 12th May, 1965, and it states: Dear Sir, During the past twelve months a number of factors have contributed to the swelling of operating costs, amongst which have been increases in the excise tax on fuel, in vehicle licence duties and in national insurance and pension contributions. It will be noticed that to the increases in all the items in that list the Government have contributed. If the First Secretary is endeavouring to inquire into rising prices, he will find the cause in rising costs. This letter is not the projection of some hard-faced Tory business man—information comes from British Road Services' own circular. It goes on: Now, however, the Company, in common with other road operators, has been faced with new and substantial pay awards. The additional costs represented by these awards are so extensive that they can not be met otherwise than by an increase in the level of charges. It may argued that such high wage awards are reprehensible, but we must bear in mind the increased costs of those working for British Road Services—increased Income Tax, increased National Insurance stamps, the increase in the cost of petrol, because workers under the Tory affluence which we have brought about during the last 13 so-called wasted years now own their cars and use them to go to work. There is also the increased cost of the Road Fund licences for their cars, increases in the price of their cigarettes, their beer, and all the rest. All these increasing costs inevitably mean an increasing pressure of wage demands. Bearing all that in mind, one is not surprised to find this letter ending: British Road Services Parcels Limited have accordingly been reluctantly compelled to revise their rate schedules. What we have been talking about and what we already have operating is the result of the Government's legislation and proposed legislation.

One of the problems in many parts of the country is that of rural transport. Rural bus operators are having a very difficult time. This latest increase has seriously added to their costs, and made it much more difficult for them to maintain their services. I have had complaints on this score from old-age pensioner constituents. One letter from an operator states: I confirm that a variation in fares is proposed by this company. "Variation" is, perhaps, a new word to use in this connection, but one knows exactly what it means. An old-age pensioner complains that it now costs 1s. 4d. for the return fare into Andover to do her shopping.

We now have a proposal that will increase the costs of British industry in its efforts to become competitive, and which will increase the hardship imposed on the elderly—people about whom we on this side concern ourselves very much. For that reason, I hope that we shall reject this Clause.

Mr. Geoffrey Lloyd

Before we part with this Clause I should like to express briefly my opposition to the increase in the motor car duty, more particularly from the point of view of the industrial Midlands, which are the centre of motor car manufacture. It is well known that not only do we manufacture many famous motor cars, but, above all, we are the makers of the components that go into the motor cars that are assembled in other parts of the country. Under Conservative Governments we have become a democracy of car owners, and not only has this been brought about by the general prosperity under Conservative Governments, but my right hon. Friend the Member for Barnet (Mr. Maudling), partly as a result of representations from the Midlands motor car industry and Midland Conservative Members, made the dramatic reduction in the Purchase Tax on motor cars which has been the prime mover in the tremendous acceleration of the motor car industry in this country in recent years.

This increase in the motor vehicle duty following so hard on the increase in the petrol duty in the Budget last autumn is the beginning of the Government turning the clock back so far as the motor car industry is concerned as we see it in the Midlands. It should be remembered that the motor car industry was able to make a very powerful case to the Government that the success of that industry in the export markets would be based upon a secure and ample home market. In fact, experience in recent years has shown that this low level of taxation, thus releasing a greater demand in this country, has had a very beneficial effect on the export trade.

In Birmingham, and the Midlands generally, we have a double interest in this matter. Not only are we the centre of motor car manufacture, but also the prosperous workers in the motor car industry are themselves big purchasers of motor cars. It would be true to say that every up-and-coming young man in Birmingham factories today expects to own his own car within a reasonable period in early life. Sometimes it is a question whether he wishes to buy his house first or his motor car first, but the present Government have made it almost impossible for him to buy a house, and now they are making it more difficult for him to finance his motor car. There is, therefore, a feeling growing up in the Midlands that the Government are hostile to the Midlands industrial prosperity, partly out of political spite because that is not an area which supported the Government in the General Election.

I therefore express opposition to this tax, and I do so to a very large extent on behalf of the industrial operatives in Birmingham who see, on the one hand, that it is now becoming more difficult for them as individuals to finance the running of a motor car, and, on the other hand, the danger of their earnings being eroded by lessened prosperity in the industry under the present Government.

Sir D. Glover

I wish to oppose this Clause. I do not think that any party has been returned to power on such a "phoney" prospectus as the party opposite. Many people supported the party opposite on the theory that they were determined to modernise Britain. If this is the theory on which they were returned to power, why is it that they show such a hatred to the aircraft industry——

The Temporary Chairman

Order. I shall be very grateful if the hon. Member will keep all four wheels on the ground.

Sir D. Glover

I am sorry that you were so quick on the ball, Sir Harry. I was not going to refer to anything else that would have been out of order. I was wondering why the Government showed such hatred to a certain industry which is a modern industry. They do not like modern industries. Why are they antagonistic to the road haulage industry? They have an in-built loyalty for the railways. I shudder to think what would be the state of this country if the Labour Party had got into power in the days of the stage coach and had nationalised it, because if they had done so we would never have had a railway system.

11.15 p.m.

It is one of the great weaknesses of nationalisation that one then has a vested interest in protecting something which belongs to the State. There is no doubt that the Labour Party has an adverse and antagonistic approach to the new industries which are competing against the old means of transport—the railways. Even now we do not have liner trains. I take some pride in the fact that I was the first person in the House of Commons, in 1954, to advocate liner trains and the means of putting lorries on them. I even described the turn-tables which could be used for that purpose. I went into great detail eleven years ago, but the railway authorities have only just accepted this idea and the railway workers even now will not accept it. I am sure that if it had been put into practice at that time the railways would have retained a great deal of the traffic which they have now lost.

When we are discussing increased costs as a result of this Clause—and I also blame my right hon. Friends when we were the Government for their attitude in this respect—we must realise that there is a great gulf between taxing consumption and taxing production and distribution and the efficiency of our economy. What we are doing again now is to put a further burden on the efficiency of British industry.

I am sorry that the Chancellor is not here. If one has a box of children's bricks—and it is as simple as this—and one brick is a 6d. increase in excise licence, another an increase in wages, another representing increased costs as a result of shorter hours, another the increased cost which comes indirectly from the cost of insurance, one is all the time adding one brick to another to build a house which is most insecurely built and which will be blown away with the wind because it is an inflationary house. It is not an economy or a society which is soundly based.

In this Clause the cost of transportation is being increased for all the people who travel to work by these mechanically propelled vehicles. We have already increased by a previous Budget the cost of the fuel which is put into these vehicles. We are making these people more and more conscious of the rise in the cost of living and they want to put the on-cost on to the product manufactured at the factories where they work. We are increasing the cost of licensing vehicles carrying goods and even carrying passengers. In each case we are adding another on-cost to the burden of British industry, and the Government who are doing this were returned to power pledged to modernise industry. The Clause makes it more difficult for industry to modernise. It increases costs which industry must try to absorb by increased efficiency. I accept the First Secretary's view that costs should be absorbed by increased efficiency, but even if the increased burdens imposed by the State are absorbed by increased efficiency it means that the chance of a reduction in prices becomes less likely. If these burdens were not put on the industrialists, their increased efficiency could bring about reduced prices; but if the State adds to the burden of their costs all the time, how can industrialists absorb the other increased costs and get their prices down?

If I am right—I am sure that all hon. Members, on whichever side of the Committee they sit, know that I am—what about our export trade as well? The effect does not apply only to consumer goods in this country; it applies to every facet of our industrial production effort, even to efficiency. Human beings are very similar, whether they are on that side of the Committee or on this, or whether they are on one side of industry or the other.

Mr. Robert Cooke

No.

Sir D. Glover

Yes. If my hon. Friend will allow me to finish, I was about to say that we all react to encouragement, and we are all discouraged when we think we have done a good job and then some other burden is put on our shoulders which takes away our sense of achievement. The Government seem to lose sight of this completely in their psychological approach to industry. What is the incentive to increase efficiency, if someone reduces his costs and he reads in the newspaper the next moment that the Government have put another burden on him? Is it surprising that people are inclined to say, "What is the use? Why should we try? If we cut our costs, the Government will only treat us as another source of more revenue". This is exactly what has happened in so many features of the Budget.

In dealing with transport, one is dealing with one of the fundamental things which can create the right climate of thought on efficiency and a dynamic society. Yet all the Government's proposals in this Clause are making people more inclined to be fuddy-duddies than they were before it was brought in. The Clause increases the burden on industry, lowering its incentive to efficiency, and I hope that my right hon. and hon. Friends will divide the Committee against it.

Mr. Norman Cole (Bedfordshire, South)

There was a famous man, Bacon, who said that he had taken all knowledge for his province. One can adapt that and apply it to this Government: they have taken all taxation as their province, without any discrimination whatever. If the history of the past few months could be rewritten, the Government might well want to think again about many of the actions which they have taken. If proof of that be wanted, there is the news this morning about the 2.1 per cent., rise in the cost of living last month, which, I understand, is a record and which, if maintained, would mean a 25 per cent. increase each year. What the Socialist target is I do not know. Moreover, the rise in the cost of living does not yet include higher transport costs because these have been postponed at the volition of the industry itself, so the effect of this Clause, not to mention other parts of the Bill, has yet to come on top of the bad news we already have.

At times, I find it in my heart, as one human being thinking of another, to feel sorry for those who have to act as defenders on the Government Front Bench during the passage of the Finance Bill. Having to make a defence without any real defence and, I suspect at times without any real conviction, we have heard tonight from the other side of the Committee much which will carry no conviction to our side or to our opponents simply because there is no case at all which can be made. I also suspect that a great deal of this has been done with great precipitation and without much thought and would not have been done if it could have been done in some other way.

The Chancellor wants to raise money, but if ever anybody could find the wrong road, or the wrong way, in which to visit this impost upon the nation, then the right hon. Gentleman has found it. The agricultural position arising from this Clause, not to mention the Schedule associated with it, is something which merits special attention. Incidentally, I am sorry that the Minister of Agriculture has gone. I can only imagine that he thought nobody was going to refer to that aspect and decided it was not worth staying; but I propose to refer to it. The Chancellor opened his Budget on 6th April, well after the farm Price Review had been concluded, so that this extra taxation on farm vehicles is just one more cost which will be added to this most important sector of our earning community.

Already we know of the difficult time through which the farming industry is passing, but this Government, not to be outdone by any extremes, are considering the re-rating of agricultural premises. The real morass into which the Government have got themselves means that they, like the Gadarene swine, will go over the cliff in full measure. It is a raw deal for the farming community, and I warn the right hon. Gentleman that it will prove to be a raw deal for the Government, because there will be repercussions in the next few months. It is a raw deal for a very hard-working section of our country—the farm community. It is a raw deal for the haulage industry; and, as my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd) has said, a raw deal for the motor trade. I represent a similar constituency to his; not all motor cars are manufactured in the Midlands. Some are made in Dunstable and Luton. It is a raw deal for the manufacturers, and for the people who own cars, many of whom are paying for them over a period.

I see that the Chancellor has now returned to the Committee. I am sorry that he has missed the gist of my remarks; the best of my remarks, but I am sure you would call me to order, Sir Harry, if I attempted to make them all over again. I see that I have also attracted the Minister of Agriculture back into the Chamber. It seems that I am having some success, if only in a personal sense.

I shall vote against this Clause, and look forward to the day when we can teach this Government a lesson by defeating them in the Division Lobby on a matter of this kind.

Mr. MacDermot

It is obvious that hon. Members opposite are looking forward with pleasure to voting against this Clause and it would be very wrong of me to keep them from that pleasure for any longer than is necessary. Under your benevolent eye, Sir Harry, it has been a far-ranging debate. First I would say that, as a representative of a railway town, I am tempted to reply in kind to many of the remarks made in the discussion by some hon. Members opposite, but I suspect that they have a guilty conscience. So reserved have they been in their attitude to the railways, and so anxious have they been to favour road haulage that they appear to think that any action taken which impinges on road transport from this side of the Committee is dictated by some doctrinaire, revengeful spirit against road transport. Hon. Members opposite are unable to comprehend, because it does not enter into their philosophy, that the right solution to the transport problem is, rightly, to integrate road and rail transport.

11.30 p.m.

I repeat, as I said earlier in our debates on various of the Amendments, that the duties and the increases in duty which my right hon. Friend the Chancellor proposes are not motivated by any kind of doctrinaire spirit or any attempt to redress the balance between road and rail transport.

Sir A. V. Harvey

The hon. and learned Gentleman has tonight been most inconsistent in his arguments. He said that the Conservative Government did little for the railways. Will he recall that a Conservative Government acquired the services of Dr. Beeching, who saved the taxpayers tens of millions of pounds, and that it was his party who sacked him?

Mr. MacDermot

We have not sacked Dr. Beeching. The hon. Member tempts me further, but I will still resist the temptation.

The one hon. Member on the benches opposite who raised a new point of relevance to the debate was the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd), who raised the question, which it has not been in order to debate up till now, of the increase in the motor car duty. It is, of course, the ordinary private motor car which is coming off best under these increases; it is having the least percentage increase of any class, the increase being £2 10s. a year in the rate of duty.

I understood the right hon. Gentleman to be protesting against even that and to be suggesting that there should have been no increase for the private motorist. I do not think that he has many of his hon. Friends with him, because most of the criticism so far during the debate has been that everyone else is having too heavy a duty imposed compared with the private motorist and that more should have been done against him. [HON. MEMBERS: "No."] Some hon. Members who have not been here during the debate are obviously unaware of what some of their hon. Friends have said in their absence.

It has been said—one hon. Member said specifically—that we should not have imposed any duty on goods vehicles but, instead, should have imposed the increase on private cars. As my right hon. Friend the Chancellor said, he is reviewing the system of duties for private cars to see whether a workable differential scheme can he imposed.

The real question on the Clause, however, is whether it is right to impose an increase in vehicle excise duty. What the increases will achieve in terms of additional revenue is £48½ million this year and £54¼ million in a full year. That contributes towards the total of additional increases in revenue and reduction of expenditure totalling £250 million in reduction of demand which is the underlying strategy of my right hon. Friend's Budget.

If we are not to obtain a comparable sum to that by means of vehicle excise duty increases, in what other way do right hon. and hon. Members opposite suggest that we should obtain it? I do not think that they are suggesting that it should be by means of any further increases in direct taxation. There was a suggestion from one hon. Member that it should more directly attack the consumer and not go into increasing the costs of industry. There have been very heavy increases in taxation directly affecting the consumer. Surely it is right that at least this proportion of the additional taxes should be spread fairly and widely over the whole of industry. That is what the increases in these duties achieve.

It was suggested that this would increase our export costs. I remind the Committee of what I have already said in our debates, that this increase in duty will qualify for an increase in the rebate on duty under the export rebate scheme. In short, the position is that I commend this to the Committee as a fair way of raising the additional revenue, and any alternative way would put a quite disproportionate and unfair burden on other taxpayers.

Mr. Powell

Four years ago almost to the day this Committee was considering the Question that Clause 5 of that Finance Bill should stand part of that Measure. It so happens that Clause 5 of the Finance Bill in 1961 increased the vehicle excise duties by about 20 per cent. uniformly. The present Prime Minister wound up, and among his parting shots I find these sentences: The Chancellor obviously decided that motors cars were a sitting target for his predatory instincts. I think that he would have liked to have gone for petrol. What is wrong about this Clause in itself and in its wider context is that the present Chancellor of the Exchequer has both gone for petrol and taken the motor car as a sitting target, for in his two Budgets within six months he has imposed first £100 million and then a further £50 million of taxation wholly concentrated upon road users. So both in its context and in itself this Clause is a bad one, though admittedly some parts are even more bad than others, and we have been spending the last eight hours in surveying the main evils which it contains.

There was the increase of nearly 100 per cent. imposed upon the motor cycle, virtually twice the increase imposed upon any other form of road vehicle, which was defended by the Government by saying that motor cyclists had been getting off too lightly for too long and that the object was to bring them more into line with the general level of vehicle licence duties upon motor vehicles generally.

Then we considered the imposition of a 50 per cent. increase, at a direct cost of £35 million, upon the productive costs of British industry. This was defended on the ground that the present level of the vehicle licence duty had become obsolete and, therefore, it was high time that it was raised regardless of the addition to those costs, about £60 million, which had been made in the autumn Budget.

Then there were cars. The Financial Secretary seemed to be surprised that attention had not been drawn more firmly to the relatively low rate by which the vehicle excise duty on the passenger motor car was being increased in the Clause. In explaining away this anomaly, which seemed to worry him more than anything else, he gave the Committee very alarming intelligence which I think will attract attention out of doors tomorrow and subsequently.

I do not know whether the Chancellor of the Exchequer was aware of the extent to which his future Budget, or Budgets, was being anticipated by the Financial Secretary. He said that the increase in vehicle excise duty was disproportionately low—those were his words and he used them several times. "But, not to worry," he said, "This is only temporary; this is only interim; this is just while we are thinking about a new system and we will come back to this next year when, we hope, we shall have the new system."

What will happen when they come back next year? I do not know about 100 per cent., but at any rate this "disproportionately low" increase of the excise duty on motor cars is to be put right. We have been promised that and let note be taken of it out of doors—it is to be put right. Admittedly, in the case of small cars not much, if any, increase is to be anticipated for next year, but for other cars there must be substantial increases and, if the words of the Financial Secretary mean anything, then the norm—or should I say the "guiding light"?—which appears to be in the minds of the Government is a 50 per cent. increase in the vehicle excise duty.

So the public now knows after today that this is not the end of the matter and that it has not seen the end of the increase in vehicle licence duties which it can expect and those owners of cars getting off so "lightly" with an increase of "only" 18 per cent., of course on top of the petrol tax increase, may be reassured that it is to be put right and that under the new system it is to be brought up to a proper proportion to other duties.

In the debate four years ago, the right hon. Gentleman to whom I have referred almost shed tears when he thought of the plight of some car owners faced with the flat-rate increase of just under 20 per cent. which that Budget imposed, and he said: … the people who own many of these old cars are people living on small fixed incomes, or retired people. We all know of them, and we could give examples of them. We all know, too, the dangers which people like this have to face.… on top of all this they are now to be asked to pay a tax of £15 instead of £12 10s."—[OFFICIAL REPORT, 1st June, 1961, Vol. 641, c. 477–8.] They now know that under the present Government they have not only participated in the £100 million increase in taxation upon motor fuel, they have not only had a further 20 per cent. increase this year in the vehicle licence duty, but, if they are unfortunate enough to be running by this time next year any but the very smallest of cars, they will be subject to a further increase in the vehicle licence duty. That they know.

What is wrong about this Clause and the reason why I ask the Committee not to add the Clause to the Bill is that it adds to the deliberate attack made upon the users of the roads in the last Budget a further attack, another 50 per cent. increase in that additional weight of taxation, and we have been given warning that that is not to be the end. We had better start now by throwing out the Clause.

Question put, That the Clause stand part of the Bill:—

The Committee divided: Ayes 159, Noes 151.

Division No. 120.]	AYES	[11.44 p.m.
Abse, Leo	Fletcher, Ted (Darlington)	Owen, Will
Allaun, Frank (Salford, E.)	Floud, Bernard	Paget, R. T.
Armstrong, Ernest	Foot, Sir Dingle (Ipswich)	Pearson, Arthur (Pontypridd)
Bacon, Miss Alice	Fraser, Rt. Hn. Tom (Hamilton)	Peart, Rt. Hn. Fred
Barnett, Joel	Freeson, Reginald	Pentland, Norman
Baxter, William	Galpern, Sir Myer	Popplewell, Ernest
Bellenger, Rt. Hn. F. J.	George, Lady Megan Lloyd	Price, J. T. (Westhoughton)
Bence, Cyril	Gourlay, Harry	Probert, Arthur
Bennett, J. (Glasgow, Bridgeton)	Gregory, Arnold	Rees, Merlyn
Binns, John	Griffiths, David (Rother Valley)	Rhodes, Geoffrey
Bishop, E. S.	Griffiths, Will (M'chester, Exchange)	Roberts, Goronwy (Caernarvon)
Blenkinsop, Arthur	Hamilton, James (Bothwell)	Robertson, John (Paisley)
Boardman, H.	Hannan, William	Rodgers, William (Stockton)
Bowden, Rt. Hn. H. W. (Leics S.W.)	Harrison, Walter (Wakefield)	Rogers, George (Kensington, N.)
Boyden, James	Hart, Mrs. Judith	Rose, Paul B.
Braddock, Mrs. E. M.	Hattersley, Roy	Ross, Rt. Hn. William
Bradley, Tom	Heffer, Eric S.	Rowland, Christopher
Bray, Dr. Jeremy	Herbison, Rt. Hn. Margaret	Sheldon, Robert
Brown, Hugh D. (Glasgow, Provan)	Hill, J. (Midlothian)	Short,Rt.Hn.E.(N'c'tle-on-Tyne,C.)
Brown, R. W. (Shoredltch & Fbury)	Horner, John	Silkin, John (Deptford)
Buchanan, Richard	Howarth, Robert L. (Bolton, E.)	Silverman, Julius (Aston)
Callaghan, Rt. Hn. James	Howie, W.	Slater, Mrs. Harriet (Stoke, N.)
Carmichael, Neil	Hoy, James	Slater, Joseph (Sedgefield)
Carter-Jones, Lewis	Hunter, Adam (Dunfermline)	Small, William
Castle, Rt. Hn. Barbara	Irvine, A. J. (Edge Hill)	Snow, Julian
Chapman, Donald	Jeger, George (Goole)	Soskice, Rt. Hn. Sir Frank
Coleman, Donald	Jones, Dan (Burnley)	Steele, Thomas (Dunbartonshire, W.)
Conlan, Bernard	Jones, J. Idwal (Wrexham)	Swain, Thomas
Cousins, Fit. Hn. Frank	Jones, T. W. (Merioneth)	Swingler, Stephen
Craddock, George (Bradford, S.)	Kenyon, Clifford	Taylor, Bernard (Mansfield)
Crawshaw, Richard	Kerr, Mrs. Anne (R'ter & Chatham)	Thomas, George (Cardiff, W.)
Crosland, Anthony	Lee, Rt. Hn. Frederick (Newton)	Thomson, George (Dundee, E.)
Cullen, Mrs. Alice	Lewis, Ron (Carlisle)	Thornton, Ernest
Dalyell, Tam	Mabon, Dr. J. Dickson	Tinn, James
Davies, G, Elfed (Rhondda, E.)	McCann, J.	Varley, Eric G.
Davies, Harold (Leek)	MacDermot, Niall	Wainwright, Edwin
Davies, [...]or (Gower)	Mclnnes, James	Walden, Brian (All Saints)
Davies, S. O. (Merthyr)	Mackenzie, Gregor (Rutherglen)	Walker, Harold (Doncaster)
de Freitas, Sir Geoffrey	MacMillan, Malcolm	Watkins, Tudor
Delargy, Hugh	MacPherson, Malcolm	Wells, William (Walsall, N.)
Dell, Edmund	Mahon, Peter (Preston, S.)	White, Mrs. Eirene
Dempsey, James	Mahon, Simon (Bootle)	Wigg, Rt. Hn. George
Diamond, John	Mallalieu,J.P.W.(Huddersfield,E.)	Willey, Rt. Hn. Frederick
Doig, Peter	Mapp, Charles	Williams, Alan (Swansea, W.)
Donnelly, Desmond	Mendelson, J. J.	Williams, Albert (Abertillery)
Duffy, Dr. A. E. P.	Miller, Dr. M. S.	Willis, George (Edinburgh,E.)
Dunn, James A.	Milne, Edward (Blyth)	Wilson, Rt. Hn. Harold (Huyton)
Edelman, Maurice	Monslow, Walter	Wilson, William (Coventry, S.)
Edwards, Rt. Hn. Ness (Caerphilly)	Morris, John (Aberavon)	Woodburn, Rt. Hn. A.
Edwards, Robert (Bilston)	Neal, Harold	Woof, Robert
Evans loan (Birmingham, Yardley)	O'Malley, Brian	Yates, Victor (Ladywood)
Fernyhough, E.	Oram, Albert E. (E. Ham, S.)
Finch, Harold (Bedwellty)	Orme, Stanley	TELLERS FOR THE AYES:
Fletcher, Sir Eric (Islington, E.)	Oswald, Thomas	Mr Alan Fitch and
		Mr. Charles Grey.
NOES
Agnew, Commander Sir Peter	Bromley-Davenport,Lt.-Col.SirWalter	Deedes, Rt. Hn. W. F.
Alison, Michael (Barkston Ash)	Brooke, Rt. Hn. Henry	Digby, Simon Wingfield
Allason, James (Hemel Hempstead)	Brown, Sir Edward (Bath)	Dodds-Parker, Douglas
Anstruther-Gray, Rt. Hn. Sir W.	Bruce-Gardyne, J.	Douglas-Home, Rt. Hn. Sir Alec
Astor, John	Buchanan-Smith, Alick	Eden, Sir John
Awdry, Daniel	Buxton, Ronald	Emery, Peter
Baker, W. H. K.	Cary, Sir Robert	Errington, Sir Eric
Barlow, Sir John	Clark, Henry (Antrim, N.)	Eyre, Reginald
Batsford, Brian	Clark, William (Nottingham, S.)	Fisher, Nigel
Bell, Ronald	Cole, Norman	Fletcher-Cooke, Charles (Darwen)
Bennett, Sir Frederic (Torquay)	Cooke, Robert	Fletcher-Cooke, Sir John (S'pton)
Berry, Hn. Anthony	Cooper-Key, Sir Neill	Fraser, Ian (Plymouth, Sutton)
Biggs-Davison, John	Costain, A. P.	Gammans, Lady
Birch, Rt. Hn. Nigel	Crosthwaite-Eyre, Col. Sir Oliver	Gilmour, Ian (Norfolk, Central)
Bossom, Hn. Olive	Curran, Charles	Glover, Sir Douglas
Bowen, Roderic (Cardigan)	Currie, G. B. H.	Godber, Rt. Hn. J. B.
Box, Donald	Davies, Dr. Wyndham (Perry Barr)	Goodhew, Victor
Boyd-Carpenter, Rt. Hn. J.	d'Avigdor-Goldsmid, Sir Henry	Gower, Raymond
Brinton, Sir Tatton	Dean, Paul	Grieve, Percy
Griffiths, Peter (Smethwick)	Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)	Ridsdale, Julian
Gurden, Harold	Longbottom, Charles	Roberts, Sir Peter (Heeley)
Hall, John (Wycombe)	Lubbock, Eric	Roots, William
Hall-Davis, A. G. F.	MacArthur, Ian	Scott-Hopkins, James
Hamilton, M. (Salisbury)	Mackie, George Y. (C'ness & S'land)	Sharpies, Richard
Harvey, Sir Arthur Vere(Macclesf'd)	McLaren, Martin	Sinclair, Sir George
Harvie Anderson, Miss	Macleod, Rt. Hn. Iain	Smith, Dudley (Br'ntf'd & Chiswick)
Heald, Rt. Hn. Sir Lionel	Maginnis, John E.	Stainton, Keith
Heath, Rt. Hn. Edward	Maitland, Sir John	Stanley, Hn. Richard
Higgins, Terence L.	Maude, Angus	Steel, David (Roxburgh)
Hiley, Joseph	Mawby, Ray	Studholme, Sir Henry
Hill, J. E. B. (S. Norfolk)	Maxwell-Hyslop, R. J.	Taylor, Sir Charles (Eastbourne)
Hirst, Geoffrey	Maydon, Lt.-Cmdr. S. L. C.	Taylor, Edward M. (G'gow,Cathcart)
Hooson, H. E.	Mills, Peter (Torrington)	Temple, John M.
Hordern, Peter	Miscampbell, Norman	Thatcher, Mrs. Margaret
Hornby, Richard	Mitchell, David	Thomas, Rt. Hn. Peter (Conway)
Hornsby-Smith, Rt. Hn. Dame P.	Monro, Hector	Thompson, Sir Richard (Croydon,S.)
Howe, Geoffrey (Bebington)	More, Jasper	Tilney, John (Wavertree)
Hutchison, Michael Clark	Morrison, Charles (Devizes)	Vaughan-Morgan, Rt. Hn. Sir John
Iremonger, T. L.	Murton, Oscar	Walker, Peter (Worcester)
Irvine, Bryant Godman (Rye)	Nugent, Rt. Hn. Sir Richard	Ward, Dame Irene
Jenkin, Patrick (Woodford)	Osborn, John (Hallam)	Weatherill, Bernard
Johnston, Russell (Inverness)	Page, R. Graham (Crosby)	Webster, David
Jopling, Michael	Pearson, Sir Frank (Clitheroe)	Whitelaw, William
Joseph, Rt. Hn. Sir Keith	Percival, Ian	Williams, Sir Rolf Dudley (Exeter)
Kerby, Capt. Henry	Pitt, Dame Edith	Wilson, Geoffrey (Truro)
Kerr, Sir Hamilton (Cambridge)	Pounder, Rafton	Wise, A. R.
Kershaw, Anthony	Powell, Rt. Hn. J. Enoch	Younger, Hn. George
King, Evelyn (Dorset, S.)	Price, David (Eastleigh)
Kirk, Peter	Pym, Francis	TELLERS FOR THE NOES:
Kitson, Timothy	Ramsden, Rt. Hn. James	Mr. R. W. Elliott and
Lewis, Kenneth (Rutland)	Redmayne, Rt. Hn. Sir Martin	Mr. Geoffrey Johnson Smith
Litchfield, Capt. John	Ridley, Hn. Nicholas

Mr. Callaghan

I beg to move, That the Chairman do report Progress and ask leave to sit again. I do not think that we have made very much progress today. Two Clauses by midnight is not a rapid rate of progress. I hope that it will be possible to make more progress tomorrow. I think that that is possible, because I cannot believe that it will be likely that hon. Members opposite will be able to find any more quotations to read. We have heard all the speeches from the 1961 debates, and I cannot think that there are any more quotations left. Perhaps I am wrong; we shall see. But I think that this would be a convenient moment to adjourn, and I move this Motion on the assumption that we shall be able to make reasonable progress tomorrow and get a fair way through the Clauses that are left.

Question put and agreed to.

Committee report Progress; to sit again Tomorrow.