§ I now come to Vehicle Excise Duty. For commercial vehicles, I propose no increase. This brings me to the car licence duty, a subject which has attracted some attention over the last few months. A Select Committee has found no evidence whatsoever for the allegations made by the hon. Member for Worcestershire, South (Sir G. Nabarro) that there had been a Budget leak about my alleged intention to raise the vehicle excise duty on cars. I must tell the House that I knew from the start that no such leak could conceivably have taken place, and that claims that it had must be, shall we say, colloquialisms.
§ I propose no increase in the car licence duty, or any of the associated vehicle duties. No doubt the hon. Member, as he has so often announced, and indeed indicated this afternoon, would like to claim that as a victory for his campaign. But I am afraid that I cannot allow him that consolation.
§ Sir Gerald Nabarro (Worcestershire, South)I will take it. Do not worry.
Mr. JenkinsAlmost the first firm decision which I took about this Budget was not to increase the car licence duty, and my decision was communicated to the Treasury in a minute dated the 31st December, 1968.
Mr. JenkinsI think I had better get on, with the hon. Gentleman's permission.
1025 Since then the possibility of such an increase has been ruled out of my thinking and that of my Department. But the Select Committee nevertheless performed a valuable task. If the hon. Member's allegations had not been investigated, a few others might have been encouraged to use similar methods to create pressures on future Chancellors, either to refrain from increasing particular taxes, or to disclose their Budget intentions prematurely. The House owes a debt of gratitude to the Select Committee for dealing so thoroughly—and unanimously—with the hon. Gentleman's allegations and with his tactics. Members of the public who have turned in car licences before they expired, in the fear that the duty would be increased in the Budget, may not be quite so grateful to the hon. Member.
I am not, however, able to avoid some further contribution from road users. Consumers' expenditure on motoring has been rising very sharply in recent years. Further evidence of this trend is given in last week's National Income White Paper, which showed that expenditure on cars and motor cycles, after allowing for price increases, was the fastest growing of all the major consumption components in 1968. Furthermore, I have been impressed by the great volume of correspondence I have received saying that it taxes on motoring had to be increased the petrol duty was much the fairest way of doing so. I therefore propose that on petrol and other light oils, and on heavy oils used in road vehicles, the duty shall be raised from the present rate, including the surcharge, of 4s. 3.7d. a gallon to 4s. 6d. This will apply to oils leaving bonded warehouses and refineries from six o'clock this evening. This will yield an additional £45 million in a full year. Many garages, I believe, rounded up the November increase in this duty by the extra 0.3d. It is reasonable to expect that they should round down the present increase of 2.3d. and therefore that their prices at the pumps ought to go up by no more than 2d. Even with this increase we will still have cheaper petrol than many European countries. My right hon. Friend the Minister of Transport has decided to arrange for stage service bus operators to be relieved of the increase by means of additional bus fuel grants under Section 33 of the Transport Act of 1026 last year. The cost will be about £2 million in a full year.
On heavy oils not used in road vehicles the present level of duty, including the surcharge, is 2.42d. a gallon. With a view to decimalisation, I propose to reduce this marginally to 2.4d. a gallon. This will cost the revenue about £800,000 a year.
This covers the list of duties affected by the Regulator. As is now routine practice, the Regulator power will, of course, be renewed, for use either up or down, for 1969–70.