Lords Sitting of 5 December 1956

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Lord Lovat—Took the Oath.

IMPROVEMENTS TO GREAT NORTH ROAD
2.34 p.m.
LORD WOLVERTON: My Lords, I beg to ask Her Majesty's Government the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what amount of work, expressed in terms of money, is at present being carried out on major improvements on the Great North Road (A.1), split up into the following sections:

(1) London to Stamford.

(2) Stamford to Doncaster.

(3) Doncaster to Newcastle.

(4) Newcastle to Edinburgh.]

LORD HAWKE: My Lords, the estimated cost of major improvements at present in progress on the Great North Road (A.1) is: London to Stamford, £566,000; Stamford to Doncaster,£734,000; Doncaster to Newcastle, £966,000, and Newcastle to Edinburgh, £360,000. This represents six schemes between London and Stamford, four between Stamford and Doncaster, eight between Doncaster and Newcastle and five between Newcastle and Edinburgh.

DEPORTATIONS BY RUSSIA AND EGYPT
LORD KILLEARN: My Lords, I beg to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether there is any difference in principle in the methods of deportation practised by the Russians and those practised by their protégé Egypt; and
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if there is none, whether both can be arraigned before the United Nations.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, in a letter to the Secretary-General of the United Nations on November 27, my right honourable friend the Foreign Secretary commented that the indiscriminate character of the Egyptian expulsion orders was reminiscent of the barbarous methods of mass deportations at short notice which have been practised in other countries. The noble Lord asks whether there is any difference in principle between Russian and Egyptian methods. Whilst not in any way condoning Egyptian methods, I must therefore point out that Egyptian actions are in a somewhat different category from Soviet actions in Hungary. The Soviet Government have transported Hungarian nationals from Hungary as prisoners into the Soviet Union itself. The Egyptian Government, by contrast, are expelling foreign nationals who are at liberty as soon as they have left Egypt.
The Soviet action in Hungary has already been challenged in a resolution passed by the General Assembly of the United Nations, on November 21, by an overwhelming majority. The Egyptian action has been challenged in the letter from my right honourable friend the Foreign Secretary to the Secretary-General of the United Nations to which I have already referred. My right honourable friend requested that his letter should be brought to the attention of all members of the United Nations.
LORD KILLEARN: My Lords, I thank the noble Marquess for his; full reply which obviously requires a little time to digest. I would only ask him whether there is not some international convention which applies against such deportations. Are they not in contravention of a Geneva Agreement? I have seen some mention of this point in the Press. Doubtless the noble Marquess will know whether it is contrary to International Law that these people should be thrown out in the way that they have been.
THE MARQUESS OF READING: My Lords, there are perhaps two aspects of this matter. There is the Geneva Convention of 1949, which I think the noble Lord has in mind. The other is the general aspect of International Law.

EGYPT: EXPULSION OF BRITISH SUBJECTS
2.39 p.m.
LORD KILLEARN: My Lords, I beg to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether a statement can now be made as to the practical measures being taken to alleviate distress among British subjects expelled from Egypt, many of whom are understood to have reached this country in a state of complete destitution; and also as to the position of Maltese and Cypriot British subjects remaining in Egypt.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT): My Lords, Her Majesty's Government naturally feel the utmost sympathy for the unfortunate persons who have had to leave Egypt. Her Majesty's Government are providing for their immediate needs as a matter of urgency. Her Majesty's Government are, however, discussing alternative arrangements for the future with the Anglo-Egyptian Aid Society and other voluntary organisations, and are considering sympathetically the question of giving financial support to the voluntary organisations, within appropriate limits. Your Lordships will appreciate the need for safeguards.
I understand that Cypriot British subjects in Egypt, who number about 4,600, are regarded by the Egyptians as being Greek subjects holding British passports. They are not affected by the restrictions placed on other British subjects, nor are any known to have been expelled. The Government of Cyprus have, however, agreed that the Swiss representative may advance reasonable travelling expenses to any Cypriot with a valid British passport who might wish to leave Egypt for Cyprus.
The Maltese community in Egypt is estimated at about 6,200, and there are indications that they are affected by the Egyptian laws in question. The question of the repatriation of Maltese who may wish to leave Egypt is at present under urgent consideration. In the meantime, Swiss representatives in Egypt have been authorised to grant financial relief to Maltese who may need it.
LORD KILLEARN: My Lords, I thank the noble Lord for his Answer. In regard to the first part, the arrival in this country of non-Maltese and non-Cypriot subjects, I should like to ask whether the arrangements, which I believe the noble Lord foreshadowed on a previous occasion, are taking shape in the way of some organisation to consider these cases as they arise.
LORD MANCROFT: My Lords, the organisation is, of course, the National Assistance Board.
EARL DE LA WARR: My Lords, could the noble Lord inform the House whether it is true that Mr. Mintoff is refusing entry to Malta to holders of British passports from Egypt?
LORD MANCROFT: My Lords, I have heard some rumours to that effect, but I should not like to comment on the matter until I am more certain of the facts.
LORD HORE-BELISHA: My Lords, may I ask the noble Lord whether there are not in this country any Egyptian funds from which assistance could be made forthcoming?
LORD MANCROFT: My Lords, as the noble Lord knows, there are certain Egyptian funds held in this country, but I should not like to enter into so far-reaching and important a question without a great deal more notice.
LORD HORE-BELISHA: Has not a great deal of notice been given of the plight of these people, and have not various means of helping them been fully considered? Has that matter not been taken into account?
LORD MANCROFT: That matter has received a great deal of notice, but I should not like to involve myself in such an important discussion as that in question and answer across the Floor of your Lordships' House.
THE EARL OF WOOLTON: My Lords, can the noble Lord say what the numbers of people coming into this country are likely to be?
LORD MANCROFT: I am afraid that at the moment we have only the haziest idea of what the numbers are likely to be.
THE EARL OF WOOLTON: My Lords, arising out of that reply, I wonder whether Her Majesty's Government might

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not consider that this is a problem which should be dealt with by the public purse, and not as a result of any charitable appeal to the Anglo-Egyptian Aid Society, to which the noble Lord has referred. That is, I am sure, a worthy society; but ought not circumstances of this nature to be dealt with by the public purse, rather than by making a charitable appeal to the public, who have already subscribed so handsomely to sufferers from the Hungarian disaster, which is of a totally different character from this?
LORD MANCROFT: My Lords, I am sure we all appreciate the difference which the noble Earl, Lord Woolton, has drawn between the Hungarian position and the situation revealed in Lord Killearn's Question. I have already indicated to the House that Her Majesty's Government are discussing alternative arrangements with the Angle-Egyptian Aid Society, and the point which the noble Earl, Lord Wool-ton, has made will, I am certain, be in the front of their minds.
LORD HORE-BELISHA: Will the noble Lord give further consideration to the matter which I put before him? As these people are the victims of Egyptian Government policy, would it not be reasonable to consider, as a matter of practical urgency, what Egyptian funds might be used for their benefit? I do not want to embarrass the noble Lord, but I ask him whether he will consider this.
LORD MANCROFT: My Lords, I took the point fully the first time the noble Lord made it. I can assure him that I will make certain that my right honourable friend the Chancellor of the Exchequer is also made fully aware of the noble Lord's views.

CINEMATOGRAPH FILMS BILL [H.L.]
LORD MANCROFT: My Lords, I beg leave to introduce a Bill to provide for the imposition of a levy on exhibitors of cinematograph films and for the making from the proceeds thereof of payments to, or for the benefit of, makers of British cinematograph films and to the Children's Film Foundation Limited; to amend the law relating to the functions and finances of the National Film Finance
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Corporation; to extend the period during which, under section one of the Cinematograph Films Act. 1948, the inclusion of British cinematograph films amongst registered films exhibited to the public in theatres in Great Britain is obligatory and increase the maximum amount of certain fees payable under the Cinematograph Films Act, 1938; and for purposes connected with the matters aforesaid. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Mancroft.)
On Question, Bill read 1a, and to be printed.

PETROL RATIONING
2.44 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH rose to draw attention to the serious effects on the administration and the economy of the country which are likely to ensue from petrol rationing; and to move for Papers. The noble Lord said: My Lords, to-day's Manchester Guardian commences its leading article with these words:
"The Chancellor's statement yesterday makes it plain in economic terms what a calamitous price we may have to pay for the Suez adventure."
I invite your Lordships this afternoon to consider the first of the economic bills that have to be met, and this new chapter in the economic history of this country which now starts— a chapter which I may perhaps call, without, I hope, irreverence: "The economic consequences of Eden."
The first assertion that I would make is that the Government of the country have made some very serious miscalculations. The first serious miscalculation they have made is with regard to the extent to which the economy of this country over this last ten years has been based upon oil. Indeed, substance is given to that-view by a statement made within recent weeks by the right honourable gentleman the Minister of Transport, who said that Her Majesty's Government have grossly underestimated the growth of road transport in this country. I think that the second gross under-estimate which the Government have made is of he effect that petrol and oil rationing will have upon the economy of the country. That is the subject which I should like to

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discuss with your Lordships this afternoon.
I do not wish to widen this debate to take in the whole of the economic situation, so clearly and, if I may be allowed to say so, so frankly disclosed by the Chancellor of the Exchequer in another place yesterday; but I feel that I cannot discuss this matter of oil rationing unless I make some reference also to the imposition of an extra shilling on the tax on petrol and diesel oil (the addition to the tax is not quite so much in the case of diesel oil), which brings petrol to the highest price in the history of this country. It is quite obvious that if the Government had taken full consideration of how our economy, poised, as it has been now for so many years, on a knife-edge, has been affected by any diminution in our supplies of oil, perhaps the ill-starred adventure in the Middle East would not have been attempted. It is also clear that we have to face a most serious position, and that we have to channel supplies of available oil to those quarters which will most benefit the economy of this country. That is the first responsibility.
I do not disguise for one moment that rationing is a dire and unfortunate necessity. But if there is to be rationing of a vital commodity like oil the Government must be prepared, right from the outset, not only to operate it fairly but to enforce it rigidly. That is what the Government have failed to do. I doubt whether the Government have not also failed in their responsibility to this country by not confronting it with the facts, because the first time that this country heard the cruel unvarnished facts of its present economic position was when the Chancellor of the Exchequer made his statement yesterday afternoon. In point of fact, the whole thing for this last two or three weeks has been "played down". The Minister of State at the Board of Trade made this most alarming statement:
"The cuts already announced in petrol, in diesel oil and fuel oil will cause personal discomfort for all of us and they will affect industry. But they will not cause industrial dislocation: nor need they lead to any reduction in British exports."
What a sad and lamentable statement, dealing, as it does, with one of the most serious crises in the economy of this country in our lifetime! I cannot but say
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that in my view the action of the Minister of Fuel and Power has fallen far below the level of what has been required. Let me give an illustration. The Minister appeared on television the other night and purported to answer some of the questions the B.B.C. had picked up from affected persons. He said that, as the cut in petrol supply was only 10 per cent., he could not understand why there was any hardship and why, as was stated by some of the sufferers, people were being driven out of business. My Lords, once there is petrol rationing, the Government have to see that it works, and surely we had enough experience of petrol rationing during the last war to know all the "tricks of the trade".
But what happened? First of all, within a short time we saw mile-long queues of motorists trying to get petrol. Why was that? The Minister says that he cannot understand it. I should have thought that the reason was apparent. If it is announced that petrol rationing is going to take place three weeks before it actually takes place, what do you think is going to happen? If the Chancellor of the Exchequer had been foolish enough —and he at least knows his job—to say that he was going to increase the tax on petrol by Is. any sooner than one hour before it actually became effective, what do you think would happen? What does the noble Earl suppose would happen if the Chancellor of the Exchequer said this afternoon that he was going to increase the duty on whisky by l00 per cent. on January 1? I give him just one guess. So the private motorist started hoarding petrol. That was the first reason why some of the poor people mentioned on the television programme were being driven out of business—for example, the man who had to garage four hire-cars because he could not get any petrol for them. Those who did not go out to hoard petrol were left high and dry. And in fairness to those who did hoard petrol, can we blame them? The Minister himself has stated that 80 per cent. of motor cars are needed for business purposes; and what were these people doing but attempting to safeguard their livelihoods?
The second cause was that some commercial consumers—I would not put the number too high—who had storage capacity of their own, filled up their own stores, locked them up and then

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went for their current supplies to the pumps. That was another reason why we saw this unholy and undignified scramble for petrol, when there was only a 10 per cent. cut. A third reason was that the Minister underestimated the amount of petrol required to be in the tanks of the petrol filling stations on December 17 and the float that has been allowed not enough. I want to press the noble Earl on this question. All those who supply petrol at the petrol filling stations have kept their tanks full and have refused to sell, not—except in isolated cases—for the purpose of cashing in on an anticipated price increase, but because they are desperately afraid that on December 17 they will not have enough petrol to meet the demand of their coupon customers; and, as your Lordships know, the only replenishment of supply is by the forfeiture of coupons.
There are two different stories—one the Minister's and the other the petrol companies'. Before this debate is over. I beg the noble Earl to give an authoritative statement on this matter, so that the position of the genuine motorist who wants to purchase petrol at the pumps between now and December 17 may be greatly eased. While on this question of organisation. I would ask the noble Earl what the Government intend to do. It is no good the Minister saying that he has powers to do this and that, unless he exercises these powers. He has said that he has power to prevent the hoarding of petrol—but that has been one of the prime causes of the trouble. Why has not the Minister acted? What is he going to do to prevent a black market in petrol? Is he going to sit in his ivory tower, give Press conferences and television interviews, and that is all?
We had enough experience in the last war to know every "trick of the trade"—and I was intimately connected with petrol rationing then. I am talking from the official side, because I was on the official side during the war. Sir Godfrey Russell-Vick rose to fame as the originator of red petrol. He was the hellhound of all black marketeers. Was he consulted? How are the Government going to stop petrol that is supposed to be used in the tanks of commercial vehicles from finding its way into private motor cars? I notice that farmers stand in a high priority. The farmer is no less honest than any other of Her Majesty's citizens,
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but I hope that farmers present will not misunderstand me when I say that I do not think he is any more honest. I do not mind the farmer having as much petrol as he wants to put it his tractors, so long as it remains in his tractors.
What do the Government intend to do? Are they going to introduce red petrol, which was the method used during the war for tracking down illicit supplies? Is there a sense of urgency about this matter on the part of the Government, or do they want it to go on in a haphazard manner, hoping and praying that it will not last very long? There is one other case I would mention before I proceed to the question of actual rationing. It has been suggested in some places that we should not allow C licence vehicles to run under present regulations without full loads. I understand that the Ministry of Transport have now said that if any C licence holder applies through the usual machinery for a temporary B licence, it may be granted to him. But why all this red tape and bureaucracy? Is there or is there not a crisis? During the railway strike we waived that regulation. Why cannot we waive it now? Is it because we need an Order in Council to alter the regulations, and an Order in Council demands some kind of emergency? Do the Government think there is an emergency to-day?
These are some of the things of which I think a lamentable lack of appreciation has been shown by the Ministry of Fuel and Power, and which have caused many genuine people who did not want to hoard petrol a great deal of serious inconvenience. When the Minister now says—and the reason is beyond my comprehension—that any case of hardship will receive special treatment, what does he intend to do? Is he going to dole out public assistance? Is he going to give a few handfuls of petrol coupons to those who suffer hardship? Where does hardship start, and where does it end? What is the difference between the one-man business hardship and that of a man who has two or three employees and who is struggling to keep them in employment? Why make such futile statements that cannot really be implemented?
If we turn to rationing, here, again, I think the Government have grossly underestimated the position. It is said—and I accept the truth of it—that what we

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have to do is to make amends for a shortfall of 25 per cent. in our supplies. Bear in mind, my Lords, that the Minister has said that 80 per cent. of the motor cars in this country are used for business purposes. The basic ration is to allow a private motor car to travel 200 miles in a month. The average mileage—averages, I know, can be misleading, but they are the only figures one can work upon—of the private motor car in this country is between 8,000 and 9,000 miles a year. So that the basic ration is not a cut of 25 per cent., but a cut of 70 per cent. I wonder whether the Government have realised the real growth of motor cars that, without any argument, are attached to employment. I wonder whether the Government have made a study of where the employees who have to get to our big factories live.
LORD DERWENT: I am sorry to interrupt the noble Lord, but does not his average of 8,000 to 9,000 miles a year include private motor cars that are used also for business purposes?
LORD LUCAS OF CHILWORTH: Yes; private motor cars in their total mileage. The Minister says that 80 per cent. of private motor cars are used for business purposes. The accepted average mileage of all private motor cars is between 8,000 and 9,000 miles a year. So that 200 miles a month means a cut of 70 per cent. We are told, also, that the maximum supplementary ration that will be allowed to the private motor car, for whatever purpose, is 50 per cent. of the basic ration. That brings it down to a cut of 66⅔ per cent. when, and if, the ration is allotted.
I return to my point, that some of the employees of our great industrial concerns live as far as 25 or 30 miles from their place of work, and use their motor cars to get to their work; and those employees who have so dispersed themselves so far from the factory are usually the technical and slightly higher grades. Unless a man lives within a five-mile radius of his place of work, at 200 miles a month he cannot go to work for a full five-day week. That is one aspect of this matter. When one realises that these cars are used on essential purposes, I think the Minister has rather underestimated the effect that this rationing
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will have upon the productivity of the country.
For commercial vehicles the basic ration will represent about 50 per cent. of normal consumption. My latest information—the noble Earl may have later information, because this matter seems to change hourly—is that the ration of an A licence long-distance haulage vehicle is based, most peculiarly, upon its unladen weight, being 2 gallons per half-ton of unladen weight, irrespective of whether the vehicle travels 100 miles or 1,000 miles. The average A licence long-distance haulage vehicle travels 1,000 miles a week. On its basic ration it cannot travel 100 miles per week. With the supplementary ration—which the official document issued by the Ministry of Fuel and Power says will be a maximum of 50 per cent. of the basic ration —its total mileage will be 120 miles a week. Yet, as I say, its normal average is 1,000 miles a week. What sense does this make? I cannot understand it. I hope the Noble Earl will be able to tell us. I can assure him that all the figures I am quoting are official figures, and they are gleaned from the official statistics that are open to everybody.
Now a word about fuel oil. What they call "Derv" is to be rationed to 33⅓per cent, of normal consumption—that is to say, a cut of 66⅔per cent. Public passenger transport is to be cut 10 per cent. Non-industrial space heating on diesel oil will be cut by—not to-33⅓per cent. Throughout the statement issued by the Ministry the words "by" and "to" have to be read carefully, because, of course, if it is "to 33⅓per cent." that means a 66⅔per cent. cut. Then, when we get to the non-industrial space and water heating by fuel oil, to which the ordinary citizen in this country was persuaded by the Government to switch over, in order to ease the solid fuel supply—and we cannot turn back to solid fuel—we are to suffer a 25 per cent. cut. All right! We cannot turn back to solid fuel, but we can turn to electricity, and I would ask the noble Earl: at what period of the winter do the Government anticipate power cuts? I have it in my mind that when the British public went over to electrical heating for their homes (I think I am right in saying this, but my memory gets dull on these things) we had to put a purchase tax on electrical equipment to prevent its being

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used; and we had power cuts. Are the Government safeguarding this position to-day?
So it all adds up to this. Is this ration—and I ask this of the noble Earl in good faith—really equitable? Is it channelled to the right purposes? It is said in the statement that 11 have before me that industrial uses are going to be cut 10 per cent. Would the noble Earl, Lord Selkirk, be good enough to tell your Lordships just what is meant by "industrial uses"? There are two kinds of industrial use. The steel industry uses 1½million tons of oil a year in its furnaces. That is one industrial use. The petro-chemical detergent industry uses oil as raw material. Is that included in this "industrial use"? The ramifications and make-up of British industry, as I have tried to tell your Lordships in every debate of this description, have been built up on the road vehicle. If you are going to contract the essential services of industry, are you prepared for the consequences?
I believe that the Government are overestimating the amount of traffic they can economically shift to the railways. Road transport last year shifted in this country nearly as many ton-miles of traffic as the railways of this country have done at their peak. Even if the Government are able to shift this traffic on to the railways, it will be done only at a considerable cost. I base my assumptions to your Lordships on official statistics. The country cannot carry on its industry under these conditions. It will be impossible to carry on industry with a cut of 70 per cent. in supplies to private motor cars, 80 per cent. of which are essentially used. I do not know what the answer to this problem is, but one must be found; because I do not think the present scheme can last for long—it must break down; and I do not want it to break down.
I have dealt with industry. Now for one brief moment let us take administration. There are many of your Lordships here who know what the rural administration of this country entails. I see sitting in front of me the noble Earl, Lord Woolton. I understand that the Lancashire County Council will hardly be able to carry on their administration. I understand that the amount of petrol which is being allocated to
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county councillors in order to attend meetings of the Lancashire County Council represents one pint per councillor. I do not know what the administration of the Lancashire County Council is going to do. I believe that what I may call the "life and death" services of rural administration will not be too badly off—I mean the medical service, the fire service, the police and similar services. But are we going to let our local. authorities' administration drift into the hands of a few permanent officials?
In Oxfordshire, a county of which I have some knowledge, 65,000 miles are travelled in one year by councillors who attend council meetings. They will have to use their basic ration, because local authority work is voluntary. They have to get to work on their basic ration, so they will not he able to do the work of county councillors. This also applies to rural district councils. I would ask the noble Lord whether he would give attention to that point. I am told—and I emphasise that I am speaking only from official documents which I have in front of me, and from announcements in the Press—that there is to be no supplementary ration at all for getting from your residence to your place of business. You may be able to draw from your firm's block grant for business purposes after you have got to the business. We cannot expect our industry to carry on under present conditions unless supplies of petrol can be channelled into what I would call the more vital sources.
I now come to what I consider the most serious point: what is going to be the effect of this petrol rationing? Standing here at a time of crisis—and I. do not think the noble Earl will deny that it is a time of crisis—one has a most difficult task. One does not want to exaggerate the ill-effects of this step and become an alarmist. On the other hand, I do not intend for one moment to bury my head in the sand of complacency. If the fuel ration is carried on at its present rate for four months, plus the further cuts that we have been warned about, this country will face an unemployment problem the prospect of which fills me with the gravest concern. May I give your Lordships one or two examples?
The motor industry, is, of course, first. These of the big manufacturers who

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have not reduced operations to a three-day week are contemplating doing so. A three-day week is the datum line. Under three days' work a week, and they might just as well close shop—it is not an economic proposition. I doubt whether it is an economic proposition for a manufacturer to keep his plant open on a three-day week, because the increase in his costs is prodigious. There are 2 million workers employed in the motor industry and its allied industries in this country. There are 863,000 employed in the road haulage industry. That is the start.
What I think is even more serious is that an increase in unemployment, which there is bound to be, might not show itself in official figures because there is the short-time working and the short pay packets. It is a desperate thing—and I think we should be alive to this—to reduce a man's average earnings of £15 a week, in full-time employment, to 50s., which he would have on unemployment assistance. It is almost as serious for him to be reduced from a full working week to a three-day working week. It may add up, not in unemployment statistics, but to a lack of purchasing power in the hands of the mass of the people of this country of somewhere in the region of £300 million to £400 million a year. Your Lordships have only to do a simple sum on a piece of paper to see that. What is going to be the result of that? That will go right through the whole of industry down to the small shop.
And now on top of that we have the increase in the petrol tax of 1s. a gallon. I want to ask the noble Earl if he will be so kind as to explain to the House why that increase has been made. I am not making a Party point here; I am genuinely asking for information. It cannot have anything to do with the balance of payments, because our dollar reserve will be affected only by what rationing will or will not do to prevent this country from having to spend dollars on Western hemisphere oil. But what is the result of saving in the buying of Western hemisphere oil? More distress for our industry. If the £30 million-odd is to bolster or support taxation, is it not a pity that the Chancellor of the Exchequer said only the other day that the loss to the Exchequer from petrol
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rationing would be £6 million a month, but that there would still be a substantial surplus?
I do not mind whether the Chancellor of the Exchequer works this out at one-third of one point increase in the cost of living index or a farthing on a 3d. bus fare: it adds up to £100 million a year. That is the figure that impresses me. A hundred million pounds a year has to be found by the consumers of this country. So what do we find? Have I been clear to the noble Earl? The Chancellor of the Exchequer says that for the four months period he anticipates £30 million-odd to be the result of an increase of Is. in the petrol tax. Three times that makes £90 million-odd for twelve months, and so the interest is of the order of £100 million a year. Have I made myself clear?
THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK): Yes, quite clear.
LORD LUCAS OF CHILWORTH: I thank the noble Earl very much.
So, as the pay packet gets less, the cost rises. I want to ask the noble Earl —and I really want an answer—does he not think it time that the Government took into counsel, and intimate counsel, the Trades Union Congress? We are not at war; we have not the cushion of armaments to absorb this labour, and this oil shortage is going to seep right through our industry. What are we going to do? I beg the Government not to drag their feet on this problem, as they dragged their feet upon the credit squeeze which resulted in that upsurge of unemployment in the Midlands. Remember that. The credit squeeze was expressly designed to cause unemployment in the motor industry. And what happened? The men who were discharged from those factories were allowed to seep away in any crack or drain, whether it was essential or not. If we have to face an unemployment problem in April, let us at least learn the lessons of the past. Let us take time by the forelock and let the Government get into counsel with the Trades Union Congress.
I have dealt now with the effect. What can be done? In my opinion (and I now express a personal opinion), we have at any cost to get dollar oil to this country—I repeat, at any cost. We have to get

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Western hemisphere oil to this country. It is no good this country, or any section of this country, indulging itself in the flights of fancy of anti-American feeling. We have lived through a week where some of us have bowed our heads in shame. At least we have to learn two lessons: first, that we cannot afford to embark on any military enterprise in this country, short of a boy scout jamboree, without the help of that great nation, America; secondly, that, whether we like it or whether we do not like it, for many of those resources, especially oil, we are still dependent upon America. I wonder what those people who were indulging in this anti-American hysteria must have felt when they either heard or read the statement of the Chancellor of the Exchequer in another place yesterday afternoon. We cannot let our industry run down. The future of this country—I would say also the future of Europe—depends upon keeping our economy going; and that is why we have to get that oil here, at all costs.
I am glad that one of the principal importers of Western hemisphere oil has a rather more optimistic outlook. Sir Leonard Sinclair, who is the Chairman of the Esso Petroleum Company in this country, gave some facts and figures which were published yesterday in The Times. I think his exact words were that the outlook was "not too dismal." While we are thinking of America, let us think of what she has done to help us in this matter—and not only America, but the American industrial concerns which have been bringing oil into this country by the million tons over these last two months. America is giving up, or has eased, her anti-trust laws. That will help. If only she will lift some of the restrictions on production from the oil wells of the United States, in Texas and Louisiana, we may see this through. I want to ask the noble Earl whether it is the policy of Her Majesty's Government to buy every gallon of Western hemisphere oil that they can lay their hands on—or rather for which they can make dollars available, so that our commercial concerns may lay their hands on it. If we can do that we may live through this dreadful time.
My Lords, before I conclude I should like to ask the noble Earl the question that I put to him yesterday afternoon about which he said he would like notice.
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That question is: will he tell the House what arrangements have been made to prevent unrationed petrol from coming into use via American Service establishments, and whether all American Service personnel in this country who have to purchase petrol from British civilian sources will be subjected to the same rationing as the British civilian? I intimated that I would ask the noble Earl that question, if he can give me a reply to the other points that I have raised, I think that he and this debate will have rendered a useful service. My Lords. I beg to move for Papers.
3.32 p.m.
LORD DERWENT: My Lords, I am grateful to the noble Lord, Lord Lucas of Chilworth, for having pat down this Motion, because it enables me to seek enlightenment from Her Majesty's Government on one or two points. I regret, however, if I may say so, that in his opening remarks—and in this serious matter of fuel we are all trying to reach a solution—he should have chosen to use certain rather derogatory phrases on a Party line about what he called the "Prime Minister's policy"—by which I suppose he meant the Policy o Her Majesty's Government. Many people, not only in this House but people of non-Party views in the country, believe that if it had not been for the policy of Her Majesty's Government there would have been a world war, and that we should not to-day be discussing the rationing of fuel oil, because there would have been none. But, apart from those differences between the noble Lord and myself, may I say that this is a problem which must be ventilated.
I am going to leave it to my noble friend on the Front Bench to deal with the points raised by the noble Lord opposite because I do not want to go over the same ground twice; but the point on which I seek enlightenment is the basic or proper reason for the increase of 1s. Per gallon on the fuel tax. I shall have one or two very brief observations to make on the effect of that increase, and I am then going to make a plea to Her Majesty's Government. The statement of the Chancellor of the Exchequer made in another place yesterday does not make it at all clear why he has put up this particular tax by 1s. There are two possible reasons; one is fiscal, and the other is to strengthen the rationing scheme.

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From the Chancellor's earlier remarks it would appear that the reason was fiscal, because, in effect, he said that owing to the closing of the Suez Canal he had lost £30 million of internal revenue and he had to make it up—that was roughly the position.
Presumably, for administrative convenience, the £30 million was to be made up by taxing a single commodity that is easy to tax administratively. But may I point out to Her Majesty's Government that, if fiscal reasons are the real reasons, it seems grossly unfair to tax one commodity and to recover from just one commodity our loss of revenue owing to the closing of the Canal. There are other commodities for which we pay dollars, and in my view they are administratively just as easy to tax as fuel. One, for example, is American films, and another is tobacco. In both those cases an increase of tax would have far less effect on the industry of the country than an increase in the tax of fuel. Therefore I submit that if the Chancellor of the Exchequer has raised this tax for a fiscal reason, then it is unfair and inequitable, and perhaps unwise. If it is a question of this £30 million. I would ask Her Majesty's Government whether they will have another look at it and spread the burden of that sum rather more widely.
It was from the earlier remarks of the Chancellor of the Exchequer that it appeared that the reason was fiscal. But from his later remarks it appeared that the tax was increased to assist the rationing scheme—to reduce demand. The words he used were these [OFFICIAL REPORT. Commons, Vol. 561 (No. 21), col. 1057]:
"…a commodity as precious as oil now is should effectively be guarded by taxation as well as by rationing"—
presumably on the lines that the rationing scheme may not be very successful. I do not know why the Chancellor of the Exchequer should take that view, but that would seem to be the view—that the scheme needs strengthening. The words are:
"should…be guarded by taxation."
Any commodity which, before yesterday, was bearing a tax which trebled its wholesale value would, I should have thought, have been adequately guarded.
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If this is indeed the reason, what does "assisting rationing" mean? For private motorists, of course, it will make not the slightest difference as regards reduction in consumption, because private motorists, by which I mean pleasure motorists—I would rather use that term, because private motors are often used in business—will, in effect, use the fuel ration which is allowed them, because the ration is so small that the expenditure out of their own pockets, even with the extra tax, will be less than what they have been accustomed to. In my view, pleasure motoring needs no consideration at the present time. But the bulk of petrol and fuel—80 per cent. is, I think, the noble Lord's figure—will be used in industry and for commercial purposes.
LORD LUCAS OF CHILWORTH: Do not put the responsibility on me for that figure; that is the Minister's figure.
LORD DERWENT: That, indeed, is the Minister's figure. Presumably under the rationing scheme fuel used for commercial and industrial purposes is essential, and if it is essential it cannot be cut; therefore, the price mechanisation cannot operate to cut it. What, then, is the point of the tax if it is to strengthen the rationing scheme? My Lords, on two previous occasions we have tried rationing by price, and on both occasions it has been a complete failure. In 1950, Sir Stafford Cripps came to the conclusion that we were spending too much money on the purchase and manufacture of commercial vehicles; he therefore raised the fuel tax from 9d. to 1s. 6d., as, in his own words "a fiscal inducement to economy." What was the result? The increase in the rate of manufacture and sale of commercial vehicles went on exactly the same as before. At a later date, in 1952, after the Abadan crisis, Mr. Butler raised the fuel tax to 2s. 6d. a gallon—that was to reduce the consumption of oil. The increase in the rate of consumption of oil went on exactly as previously.
In this question of fuel oil the price mechanism as a deterrent has not worked on two occasions. But there is this unfortunate danger. Both those increases of tax were designed to meet a crisis. In both eases the crisis came to an end; in both cases the increased tax has remained. My noble friend, Lord Swinton, said to

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me yesterday: "Beware of temporary taxes! When a tax is permanent it frequently comes down. When it is temporary, it is there for ever." We are perfectly prepared for sacrifices at the present time. I hope that the load of this burden will be spread instead of being put wholly on fuel. But if they intend meanwhile to maintain this higher rate of fuel tax, I would ask for this undertaking from Her Majesty's Government, and I do not think it is an unreasonable one: that they should, in the immediate future, make a firm statement that the increase in tax will he taken off as soon as petrol rationing comes to an end. If this tax is necessary in conjunction with petrol rationing, then it should be unnecessary when petrol rationing comes off T would ask Her Majesty's Government for that undertaking.
3.42 p.m.
THE EARL OF SELKIRK: My Lords, I am sure it is a good thing that the noble Lord. Lord Lucas of Chilworth, should have raised this question to-day because we are indeed facing some hard facts. The noble Lord has recognised very frankly, as we have so often recognised in this House, that in our economy we live on a knife-edge. It will be an ill-wind which does not blow the effects of that knife-edge into many places where, perhaps, they have not blown before. Moreover, we are at this time already pressing up to the limits of our resources of power. That is why we are pressing on with developments in atomic energy. But we have no slack in the realm of power on which we can call at the present time.
Perhaps it would be interesting if I were to say a word or two about the supply position. The normal consumption of oil in Europe is about 130 million tons a year. Of that, 100 million tons come from the Middle East, and of the remainder about 20 million tons come from the Western hemisphere and 10 million tons from internal production. The effect of the closing of the Suez Canal and the Iraq Petroleum Company's pipeline is that we shall get only some 50 per cent. of the oil front the Middle East; which means, as a gross figure, a reduction of something under 40 per cent. We have virtually no spare tankers in the world to-day. Oil is carried by about 2,500 tankers. The Americans have about
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thirty-eight in what they call "mothballs", but these are not enough to make any material difference to the position. If we were to restore supplies to normal to-day we should require an additional 700 tankers, each of about 16,000 tons dead weight. Any increase of oil supplies, therefore, means taking tinkers off the Middle East run and putting them on the Atlantic run. The result is that for every tanker put on the Atlantic we lose something from the Middle East. Accordingly, if we take another 2 million tons from the Western hemisphere we lose 1 million tons from the Middle East. That is precisely the problem we are facing at the present time.
Our position depends on the amount of additional oil that the Western hemisphere can provide. At present we are planning on the assumption that European supplies can be maintained at 75 per cent. of normal levels, which means that the Western hemisphere will have to increase production by about 40 million tons a year. That will obviously require an enormous effort to achieve, but I have no doubt that it will be attempted. As soon as it became clear that the Canal was closed, and the Iraq Petroleum Company's pipe had been disabled, the oil companies who supply Europe endeavoured to increase supplies from the Western hemisphere. That was facilitated by the ability of American oil companies to co-ordinate their activities, made possible by a statement from the Department of Justice that they could coordinate their efforts without infringing anti-trust laws.
The task of handling the situation in Western Europe falls to the Organisation for European Economic Co-operation, and the need for such a body to be in a strong position is now clearer than it ever was before. The Council's resolution of November 9 confirmed that member countries of the Organisation in Europe would share the burden on a fair and equitable basis. The Oil Committee of the O.E.E.C. met on November 29, and made a report laying out the present position and recommending the action to be taken. This has now been adopted by the Council. To-morrow, December 6, the Oil Committee of the O.E.E.C. will be meeting the Industry Advisory Committee (OPEG) on which the Shell Group, British Petroleum and the Compagnie Francaise de Petrole will be serving. It

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is not proposed to proceed by way of full-scale allocation at this juncture, but I think we can be confident that the very close liaison between the seventeen Governments and industry will go a long way to securing a fair and equitable distribution of available stocks. In the meantime, member countries of the O.E.E.C. are submitting the necessary information about stocks, arrivals and requirements which should provide the basis for the necessary diversion and distribution. For those who are interested in the future of Europe I think it is impressive to see the close co-operation we can gain in a matter of absolute and fundamental importance such as this.
May I turn for a moment to the question of rationing. The noble Lord, Lord Lucas of Chilworth, calls the proposed scheme "haphazard". Perhaps I might just explain to your Lordships the principles upon which we are proceeding. First, we have to obtain a 25 per cent. reduction in total consumption of oil, and to get this as quickly as possible, broadly on a fair basis, and bearing in mind, of course, that judicially precise allocations take longer to achieve and require more officials to work out. Moreover, we are, of course, doing all this on a temporary basis. That is one of the assumptions on which we proceed. A second point is that we have to maintain a high level of industrial production. For that reason, we have to keep the wheels of industry turning. We have to transport people to factories, and to enable raw materials to go to the factories and finished products to go to ports for export. A third necessity is the maintenance of essential supply services, such as food, medical needs, public services, including water, power, fire services and police. Broadly, that is the problem. If I may give your Lordships the general proposals, they are: voluntary rationing by a reduction of 10 per cent. on November 8; rationing of petrol, December 17; industrial limitation of supplies, January 1, and a cut of 33⅓per cent. in non-industrial central heating on December 1.
May I turn for a moment to the question of supplies to industry—perhaps the most important of all. I do not pretend that there is not a very great problem here, but I do think it is possible to overestimate its importance. At the present
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time, not more than 11 per cent. of industrial power comes from oil. The present cut in diesel and fuel oil is 10 per cent., and on diesel oil this will be raised to 20 per cent. as from January 1 next year. In terms of total consumption by industry in this country, these cuts represent between 1 per cent. and 2 per cent. The most difficult problem is going to be to maintain fuel oil to industry at the present level. So far it has been possible to keep the cut as low as 10 per cent. only by reducing offtake of ships' bunkers, on the one hand, and by the maximum economy in the use of fuel oil at power stations, on the other. The Minister of Fuel and Power has already issued a warning that further cuts in fuel oil may in time become unavoidable. That is broadly the position in industry in this country.
LORD PETHICK-LAWRENCE: My Lords, I am sorry to interrupt the noble Earl, but may I ask him this question? I realise the difficulty under which he is proceeding, and if he cannot answer the question straight away I shall understand. He has given figures relating to the percentage of oil used by industry. Do I understand that that is over the whole of industry? Is it not likely that certain individual factories or works which are run entirely on oil will be much more seriously affected than others which are not completely dependent on oil, in so far as they will suffer this diminution in their supply?
THE EARL OF SELKIRK: I was giving a picture over the whole of industry. There are industries which, clearly, are going to be hit hardest. You cannot share the burden equally in this matter.
LORD LUCAS OF CHILWORTH: Will the noble Earl forgive me for interrupting? I only wish for enlightenment generally on one point. He said, if I understood him, that fuel oil for nonindustrial use was going to be cut further by 33⅓per cent. on December 15. The official statement from the Ministry was that the increase in the cut would be 25 per cent. That is a very important item.
THE EARL OF SELKIRK: My Lords, the limitation on non-industrial use is being increased as from December 1. I will refrain from repeating the percentage until I have obtained confirmation. I should not like to say offhand what

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it will be one way or the other. With regard to steel production, our hope is that it will not be adversely affected. The sharing of resources to the best advantage is now being organised by the Iron and Steel Federation and the Iron and Steel Board. In the iron and steel industry additional creosote-pitch is being used in a number of cases in place of fuel oil. So, as I say, we sincerely hope that there will be no reduction in the output of steel and that, in fact, it may possibly be increased.
With regard to diesel oil, I admit frankly that considerable difficulties may arise. First, they may arise for this reason. In many of the plants it is not possible to use an alternative to diesel oil. Secondly, there is no large sector of use which can be painlessly cut down. So I admit frankly that the use of diesel oil presents a serious problem, and that is why, for one reason or another, we have tried to safeguard it as far as possible. In. regard to fuel oil, we hope that everyone who has the opportunity of converting from oil to the use of solid fuel will do so during the period of oil stringency.
Nothing has been said about agriculture and fisheries and I do not think that civil aviation was mentioned. The noble Lord, Lord Lucas of Chilworth, raised one or two questions about heavy goods vehicles and perhaps I might say a word or two about them. Over the goods fleet as a whole the basic ration for petrol vehicles will he 50 per cent. of normal consumption and for diesel vehicles 33⅓ per cent. There will also be supplementary rations which would increase petrol vehicles' rations by 25 per cent. of their normal consumption and diesel vehicles' rations by 40 per cent. of normal consumption. If the noble Lord wishes I will give him broadly the picture of the sort of approach which will be made to this supplementary rationing for goods vehicles. These supplementary rationing arrangements will be made by the Regional Transport Commissioners. The essential criteria will be whether it will be essential for the goods to be moved by road. In particular, special consideration will be given to feeder services to and from the railways and to ports and to traffic requiring the use of specially constructed vehicles. On the other hand, long-distance work and C-licence vehicles of one ton or less will be treated, frankly, rather severely.
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Special priority will, however, be given to milk and other basic foods, as well as to various types of raw materials and items of importance to agriculture.
LORD LUCAS OF CHILWORTH: I hope that the noble Earl will not mind my interrupting him once again.
THE EARL OF SELKIRK: Not at all; I am only too glad to help.
LORD LUCAS OF CHILWORTH: The noble Earl can help the country. The official statement issued by the Ministry of Fuel and Power in respect of commercial vehicles was to the effect that the basic ration was going to be 50 per cent. of normal usage—I am now talking about commercial, goods-carrying vehicles—and that the supplementary ration maximum would be 25 per cent, of the basic. In effect, the ration has been allocated to the goods-carrying, A-licence vehicle on a different formula altogether. It has been allocated to them on a basis of two gallons per half-ton of unladen weight—this having no connection with what the normal usage was. Now the average usage of A-licence haulage vehicles is 1,000 miles a week. At two gallons per half ton unladen weight that vehicle will be able to travel only 100 miles a week, and when it gets its full supplementary ration 120 miles a week. There is something wrong as between the first official statement and what is, in fact, happening; because if the ration is to be 50 per cent. of normal usage they should have sufficient petrol, on the average, to run 500 miles a week; and with 25 per cent. supplementary ration 750 miles a week. That is what I ask the noble Earl to elucidate.
THE EARL OF SELKIRK: I would rather not go into the question of mileage. I think, though, that there is one fundamental point that has to be made. The general principle is 75 per cent. of total normal consumption throughout the country. That is the average over the whole field. Some may get more and some may get less. I do not wart anyone to presume that they have any right to 75 per cent. of normal consumption. It is available according to the criteria issued yesterday.
The noble Lord also raised the question of C licences. The Government are asking licensing authorities for goods vehicles to consider sympathetically the issue of short-term B licences to holders

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of C licences to enable them to carry in addition to their own goods the goods of another person, which would otherwise have been carried in C licence vehicles. They will have to show that it is necessary, of course, and that there will be a fuel saving. I think it is right that, so far as possible, goods vehicles should not run empty. The noble Lord raised the question of motor cars. I must confess that I was glad that he did not say that the rationing of motor cars was not sufficiently severe. In fact, he took an entirely opposite line. He said it was too severe. I would only say that I agree that it is severe, but it has to be severe. It is much more severe than, in fact, it was at the end of the last period of rationing in 1950, when it was only 10 per cent. to 15 per cent. below normal requirements. I accept that it is severe. I am glad that the noble Lord has made that point, because the vast majority of private cars are, in fact, used for essential purposes. The official definition of a "private motor car" is a motor car that does not seat more than seven people, which is rather different from the easygoing vehicle which we conjure up in our minds when we talk about a private motor car. Those engaged in business will receive an additional 50 per cent., or enough for 100 miles. While I cannot say that there will be any extensive reconsideration in the New Year, I can tell the noble Lord that all the points he has raised this afternoon will come under consideration in due course, particularly where questions of livelihood and production are concerned—I can give the noble Lord that assurance—if, of course, the necessary oil is available.
The noble Lord asked about garages, and I can give him the assurance that garages will receive 90 per cent. of their supplies until December 16, and, in addition, they will receive a "topping up" of three more days' supply. That seems to me a complete answer to the point he raised, and I think it ought to satisfy the minds of any garage owners who are uncertain of their position at that date.
LORD LUCAS OF CHILWORTH: My Lords, I am grateful to the noble Earl for making that statement and for allowing me to interrupt him. Do I understand that, without any equivocation, all
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garages throughout the country will receive between December 1 and 1690 per cent. of their December, 1955, takings (if I may put it that way) from the companies, plus three days as a "topping up," taking, I suppose, the average of the thirty-one days? Is that what the noble Earl means?
THE EARL OF SELKIRK: If I may, I will answer that question specifically later.
May I turn now to the question of petrol for county councils, especially in regard to Lancashire, in which, naturally, I have a close and special interest. I do not know whether the noble Lord was mixing up beer with petrol when he talked about "one pint a councillor." In any case, I cannot find the slightest justification for that statement. The basic ration is supposed to be used for essential purposes, whether it be attending meetings of the county council or work. The basic ration is not given for pleasure motoring but for an essential public service of some kind or another. In addition to that, there is to be an initial allocation to each local authority of sixty gallons. Some authorities might find this enough where plenty of public transport is to be found, but in some cases that may not be so and the Government are anxious that proper democratic control of local government should continue.
The Minister of Housing and Local Government is not proposing to take any steps to place the conduct of business on a war-time footing, and it is clearly intended that members of local authorities should be able to get to meetings and be able to exercise their proper functions, but it is hoped that they should use public transport wherever possible. I see no reason why anybody should not use public transport if it can possibly be done. There is no reason for anyone to feel that his work is so important that he should not use public transport.
LORD LUCAS OF CHILWORTH: If it is available.
THE EARL OF SELKIRK: 1 agree with the noble Lord—if it is available.
THE EARL OF MANSFIELD: My Lords, do I understand from what the noble Earl has said that every county council is to be allocated the same gallonage of petrol, whatever the area. the number of councillors or the number of public meetings?
THE EARL OF SELKIRK: I do not think that any of my words would permit that interpretation. There is to be an initial standard allowance, but I am given to understand that the special requirements of county councils and others will be considered. It is very much hoped that, with the use of public transport, and with some adjustments—for example, there might be a concentration of meetings into one day, or something of that kind—members of local authorities will be able to exercise fully all their public duties.
THE EARL OF MANSFIELD: My Lords, the noble Earl will bear in mind that in many areas in Scotland, as well as in England, councillors have to come great distances, often along roads where there is no transport of any kind.
THE EARL OF SELKIRK: Because that is so in certain counties of Scotland, it does not mean that in highly centralised and industrialised areas the same allocation of petrol should be given. That is the point I am making, and I am sure that the noble Earl will agree. No one has raised the question of Government cars, but that point is being given attention, and restriction in the use of Government cars will be fully carried out.
LORD LUCAS OF CHILWORTH: Public transport.
THE EARL OF SELKIRK: That depends on what it is. It is not always possible to use public transport, but that will be done, even where it causes a considerable waste of time and loss of efficiency. I could make a detailed statement on the use of petrol by the three Services, but all. I will say is that, broadly, the Services are extending their economy from the 10 per cent. already approved to something approximating to the general level required throughout the country.
May I say a word about the United States Air Force, because the noble Lord, Lord Lucas of Chilworth, raised that matter especially? All American personnel, in their private capacity, will be subject to the rationing of fuel. In any case, the great majority will get their petrol from public pumps. There are a few isolated cases where that is not possible, but that will not in any way absolve them from surrendering coupons for
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petrol used for private purposes. In general, the attitude of the U.S.A.A.F. clearly indicates that. they are anxious to co-operate in the fullest possible measure, arid I think that we should express our appreciation of what they are doing. I am told that their attitude is to be at least as "tough", as that of the British Services, if not "tougher". One result of the present situation, of course, is that more weight will be thrown on the railways, but I know that British Railways are fully prepared to accept what has been estimated to be a 20 per cent. increase in load, a great deal of which will be general merchandise. They are taking a number of other steps, which I shall be happy to enumerate to your Lordships if desired, to deal with the problems that are likely to arise and to meet this emergency.
May I say one or two words on the general economic position, about which the noble Lord, Lord Lucas of Chilworth, spoke? It is extremely difficult to quantify the measure of dislocation, and therefore it is not easy to state precisely what the position is likely to be. I have already mentioned steel, and I would also mention coal, which is of tremendous importance. It is hoped that the production of coal will be not only maintained but increased. The Minister has recently estimated that about 2 million additional tons of coal are likely to be used this winter—that is, in both direct and indirect consumption. We hope that the gas and electricity industries will be able to meet the demands which are made of them, and will be able to carry that through while reducing their requirements of oil to the maximum extent. We have considered the possibility of increasing shale oil and oil from hydrogenisation, hat these would play only a small part in the time likely to be available.
If I may estimate the general position, it seems to me to be this. There is a more pressing need than ever for exports, although it may be difficult to maintain production. It therefore follows that a firm hand must be maintained on home demand. In other words, we must shield the external economy against possible damage which these problems of oil might cause. I will only deal broadly with the points made by my right honourable friend the Chancellor of the Exchequer yesterday. He has emphasised the need for maintaining a strict credit control at

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the present time, and he has given a frank warning that he will not hesitate to take steps to increase the level of income tax in three or four months' time should he consider it to be necessary at that time. He then went on to say that he had imposed a duty of 1s. a gallon on oil. Both noble Lords who have spoken this afternoon have asked me to give some explanation of why that has been done.
First of all, let us be clear as to the position. The Treasury would actually lose money by rationing. Therefore, this, to a certain extent, can be regarded as no more than recouping the Treasury for the loss in oil revenue which would otherwise have been received. But that is not all. If this had not been done, those people who normally spend money on motoring would have more money to spend because they could not spend it on petrol. The effect of that, in simple terms, is inflationary to that degree; and in the months to come there may be a certain danger in that respect. I think that is the reason which has made the Chancellor of the Exchequer stress, when viewed with the background of the loss in our dollar and gold reserves, the necessity of ensuring that no suggestion of inflationary pressure should arise at the present time. I would say to my noble friend Lord Derwent that that is the basic reason which impressed my right honourable friend to take that action.
LORD DERWENT: I am sorry to interrupt the noble Earl, but he has not yet said—perhaps he has it in mind to do so —why the recouping of this sum must fall on a commodity which directly affects, and somewhat adversely, the running of industry, whereas other commodities, which also cost dollars and also syphon off spending power, have not been dealt with for example, tobacco.
THE EARL OF SELKIRK: The noble Lord is raising an extensive point, and I am not sure that I know the answer to it. However, I believe that tobacco has nearly reached the point of no return, when an increase in the tax on tobacco would reduce the revenue. That may or may not be so. In any case, in all the circumstances, this seemed to be the most effective way of doing what the Chancellor of the Exchequer wanted. If you put the price of something up, you conserve
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it. This is a valuable commodity to-day, and it is not unnatural that it should cost a little more. I would mention, also, as a sidepoint, that it will exercise some pressure to prevent oil going into the black market; the fact that it costs more will make it less likely to go there. I would say this to my noble friend Lord Derwent. It is estimated that this extra tax will raise £30 million in four months. The Chancellor of the Exchequer said this—and I repeat his words:
"I regard the new petrol tax as a temporary measure during the present oil shortage."
I hope those words are sufficiently definite to meet the point my noble friend has in mind.
LORD DERWENT: I am sorry to interrupt the noble Earl again, but that has been said by two Chancellors of the Exchequer, and the tax has never been temporary. Cannot we get an undertaking that this increase in the tax will follow the ration?
THE EARL OF SELKIRK: The scepticism of the noble Lord is, I am afraid, beyond me. I can add nothing to what Chancellors of the Exchequer might have said in the past.
LORD DERWENT: Will the noble Earl ask if the Chancellor of the Exchequer will give that undertaking?
THE EARL OF SELKIRK: Would the noble Lord repeat it?
LORD DERWENT: That the additional tax on fuel will be taken off when fuel rationing comes to an end.
THE EARL OF SELKIRK: I will see whether something further can be said about that.
LORD DERWENT: I thank the noble Earl.
THE EARL OF SELKIRK: I do not think I need repeat what has been said about the fall in gold and dollar reserves, except, perhaps, to remind the House of what the Chancellor of the Exchequer said in this respect. He said, first, that the loss has arisen from the international situation and should not be regarded as permanent; secondly, that for some time there has been a reduction in sterling balances, particularly those held by the non-sterling area, while reserves have been rising—whereas I think the House

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knows the opposite generally takes place; and, thirdly, that our internal position is stronger than it was twelve months ago, when the problem was internal rather than external. I feel that if we are able to maintain the relatively strong trading position that we have had in recent months, the fact that our liabilities have been reduced will speed our recovery.
But the effects of oil shortage arc bound to affect cur balance of payments and our reserves, and with that in view, the Chancellor outlined certain measures which he proposed to take immediately to fortify our position. I would add only that the Chancellor has emphasised that the three essential points that we primarily have in front of us are the maintenance of the pound sterling at its present parity; to maintain industrial production; and to maintain and increase the volume of world trade. Those are measures which are going to affect us all vitally.
I have endeavoured to give the broad position of the supply of oil; I have tried to explain the points about rationing which the noble Lord, Lord Lucas of Chilworth, has raised, and I think I have answered—
LORD CHORLEY: I am sorry to interrupt the noble Earl, but is he not going to say anything more about rationing? The noble Lord, Lord Lucas of Chilworth, addressed to him some very searching questions as to how the Government were going to prevent black marketing; whether they were going to use red petrol; and whether anything is to be done to put an end to the ramp going on of giving away old cars. Those are important points, but the noble Earl seems to have completely ignored them.
THE EARL OF SELKIRK: There is a great deal further that I can say about rationing, but I thought I had talked long enough. However, I am quite happy to go into it at greater length if the noble Lord wants me to. So far as red petrol is concerned, we do not propose to use it for the time being, but, if necessary, we shall bring it in. So far as the question of giving away old cars goes, at the moment I am unable to see how that can be stopped. I do not know whether the noble Lord has any suggestion to make how the giving away of old cars can be prevented. I should not have thought it was easy.
LORD CHORLEY: It is easy to prevent people from collecting a lot of coupons from all sorts of different cars. A man ought to be limited to tin use of one car.
THE EARL. OF SELKIRK: So he is.
LORD CHORLEY: The registration authorities must be in a position to know whether a man has more than one car registered for his use.
THE EARL OF SELKIRK: That is correct. The petrol coupons are limited for use by one car, and it is an offence to use them for another car, except in the case of additional coupons given to a firm engaged in business. In those cases, the firm is fully entitled to allocate the non-basic ration to any car used by that particular firm. Those rations are fully transferable. But in regard to other cars the coupons are attached strictly to the car. Moreover, suppose the noble Lord has a car and its licence runs oat on December 31. He is expected—in fact, he is obliged by law—to return the coupons if he does not re-license his car. It would he quite wrong to keep the coupons if the car was not licensed on January 1. I am afraid I find it difficult to understand how it is possible to prevent the giving away of cars at the present time.
LORD LUCAS OF CHILWORTH: My Lords, on the question that the noble Earl has just answered, may I point out that he said that there is an issue of four-monthly coupons, and if you do not license your car on January 1 you are in honour bound to surrender three months' coupons. But it has been stated officially that you can use your four months' coupons in one month, if you so desire. "Therefore, it is quite in order for anybody to use his four months' basic ration between December 17 and the last day of December, and then not to license his car. If the noble Earl, or the Minister of Fuel and Power, thinks that any motorist who does not license his car on January 1 and has surplus coupons to spare is going to hand them back to the Ministry, his knowledge of human nature is somewhat different from mine. They will, of course, find their way on to the black market.
THE EARL OF SELKIRK: Of course, that is one of the fundamental things

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about rationing. I know of no system of rationing in which there is no black market. That is why I believe in the law of supply and demand, and that is one of the reasons why I differ, perhaps, from the noble Lord.
LORD CHORLEY: Do the Government as a whole believe that an effective scheme cannot be introduced against black marketing? If so, I think it is time they got out and gave way to some other Government which could enforce it.
THE EARL OF SELKIRK: The noble Lord is entitled to make a political point, because I made one. But I know of no system which is entirely free of any suggestion of black market dealing, and if the noble Lord knows of one, no doubt he will tell me in due course.
I have one or two other points which I should make. Non-industrial central heating diesel oil is cut by one-third on December 1; fuel oil is cut by one quarter on December 1. We were confusing those two, and I am sorry.
LORD LUCAS OF CHILWORTH: Will the noble Earl deal with the 60 per cent. question before he sits down?
THE EARL OF SELKIRK: I am told that a garage with a normal consumption in December of 10,000 gallons will get 9,000 gallons for the whole of December. They will therefore get 4,500 gallons between December 1 and December 16, plus 10 per cent. topping up, 900 gallons, also before December 17. If I may read between the lines, when the noble Lord talks about 60 per cent. he is talking about 60 per cent. of the whole of December, and I think that is somewhere about the figure which I have given. I hope it meets the point the noble Lord has made.
I have tried to deal with all the points, and I do not wish to keep your Lordships unduly on these matters. I have tried to outline the problems which we have in front of us. This is a big test for industry. The whole of industry is faced with a situation which will require both adaptability and flexibility to meet the many problems which we have to face to-day. It is a challenge to its ingenuity, and I believe it will be able
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to face it with determination and resource. If we are able to do so, I believe we shall get through this trouble without any serious consequences which might otherwise arise from it. If we do not face it in that way, if we face it passively and simply cut down production because it is difficult, no doubt we shall find it difficult. But I see no reason at all to believe that that should be the case. If we are prepared to recognise that these are common difficulties which will be overcome by facing them in common, then I think we shall get through this winter without increasing the problems which we face at the present time.
The noble Lord, Lord Lucas of Chilworth, referred to some comments in the Manchester Guardian on the subject of price. May I refer to the subject of price and give a quotation from a distinguished aviator, Miss Amelia Earhart, who lost her life over one of the oceans. She said:
"Courage is the price that life exacts for granting peace."
4.26 p.m.
LORD LUCAS OF CHILWORTH: My Lords, the noble Earl has not wholly answered my questions, and therefore perhaps I have a legitimate complaint, though I can assure him that he has my unbounded admiration for the manner in which he has tried to answer. I knew that I had put him to rather a searching inquisition. Versed as he has to be in such a wide diversity of subjects, and as this particular subject was one of my special cares during the last war, I think perhaps the odds were unduly weighted on my side of the House.
May I, in asking your Lordships' permission to withdraw my Motion, say this. The noble Earl ended his remarks with a quotation about courage. The British people have never lacked courage when they have had two things: good leadership, and the truth told them. If Her Majesty's Government will bear that in mind, they will not go far wrong. To take away any stigma upon members of the Lancashire county council that they drink more beer than they consume petrol, may I quote from a letter written by the secretary of the County Councils' Association to the Minister of Housing and Local Government upon this question of the allocation of petrol for county

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councillors' attendance at council meetings and committee meetings? It says:
"First, the case of Lancashire with an area of something slightly over 1 million acres and a county council membership of 160. I understand that for the four months' period the allocation for local authority members is 60 gallons, less than one pint per member per month."
If the noble Earl wishes to work it out—he would need to have the mileage that the councillors travel to their meetings—he will see that it is one pint per member per month.
THE EARL OF SELKIRK: I hope the noble Lord recognises that I did say that this was purely a provisional distribution, to get the scheme started. I want to make that quite clear.
LORD LUCAS OF CHILWORTH: I am grateful to the noble Earl; I missed that. Oxfordshire, of course, has a slightly smaller number of members of the county council, but last year they travelled 65,000 miles to council and committee meetings in widely dispersed rural areas. They have not yet received an allocation at all. I hope it turns out to be more than one pint each.
I am glad the noble Earl has cleared up this question of garages, because unless they have a "float"—which he now says will be about 10 per cent. of the December, 1955, gallonage—they will not he able to meet the coupons that will have to be given up so that they can replenish their stocks. I am grateful to the noble Earl for what he said about the American Air Force. I echo his feelings precisely. We are very grateful to them for showing that spirit. I understand from what the noble Earl says that when any member of the American forces in this country draws petrol from a civilian pump he will have to give up coupons; and that, if he draws petrol from internal sources they will demand from him an equivalent number of the coupons which he has for running his private motor car.
I am also grateful to the noble Earl for saying that, in spite of what the noble Earl, Lord Gosford, said yesterday on this question of the Services' usage of petrol, the Services will eventually come down to practically the same rationing as the civilian population. That is what I understood the noble Earl to say.
THE EARL, OF SELKIRK: That is so, yes. Here again, of course, it is like
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everything else: the requirements are slightly different, just as some parts of industry have different requirements from other parts of industry.
LORD LUCAS OF CHILWORTH: The noble Earl will understand that that means that the rationing will be far more drastic. The point I wish to make is that the private car, about which we have been talking, is being rationed at about 70 per cent. below its normal usage. The noble Earl must understand that—I do not think he does understand it properly. The average private car's mileage in this country is 3,000 to 9,000 a year. If that is to be cut to 200 miles per month, it means a 70 per cent. reduction If the private motorist gets the maximum supplementary ration of 50 per cent., it brings that up only to 300 miles a month, which is a 66⅔ per cent. reduction. So do not, I beg your Lordships, run away with the idea that the rationing of the private motor car is only a 25 per cent. reduction. It is not. If the Services are coming down to that, then I shall be very happy indeed.
THE EARL OF SELKIRK: Of course, practically nothing is 25 per cent. In almost every branch, whether it is Derv, fuel oil or petrol, you bring it right down to the basic and then adjust it by means of supplementary rations.
LORD LUCAS OF CHILWORTH: If industry is going to get no cut at all, then somebody is going to get a bigger cut: that is what it means. I quite agree with the noble Earl—I stressed this at the time I originally spoke—that the basic ration must be used for the process of getting to work. So, if a person is a worker in the daytime and a county councillor at night-time, where does he get the petrol to go to his county council meetings if he has used up to go to work? For anybody who lives outside a radius of five miles frog his place of work when there is no public transport—where, through the dispersal of industry, the population have gone outside the radius of public transport—that is a serious matter. I expect we shall return to this topic again. I do not want to prolong the debate and waste your Lordships' time, although perhaps your Lordships will permit me to say that we have elicited this afternoon, in your Lordships' House, far more common-

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sense explanations than all the paraphernalia of Press conferences which the Minister of Fuel and Power has had since the idea of rationing first started.
There is still the question of long-distance road haulage. There is a difference between what the official announcement has said and what, in actual practice, these undertakings are receiving. In fact, the average cut for them is 80 per cent. I will not ask the noble Earl to go into it again because it is highly technical, but will he promise me this? Will he get the Ministry of Fuel and Power, without any delay, to make an authoritative statement upon this point, so that the road haulage people of this country may know just what they can expect?
THE EARL OF SELKIRK: May I make this point? There has been published a statement, which I have here, of December 4 (that is yesterday) about supplementary rations of motor fuel for goods vehicles. I believe this meets precisely the point. I should like the noble Lord to give it such advertisement as he can.
LORD LUCAS OF CHILWORTH: I am grateful to the noble Earl. My last remark is this: that all the extra cost of this will not fall upon the motorist, because the motorist in essence is a business man; it will be passed on to the consumer. That is where it will eventually fall. Public transport fares will go up—they must go up. London Transport fares must increase. They cannot bear this burden of £4 million extra, which is what the extra ls. per gallon tax will mean to them. Food distribution costs will go up; everything will go up. In the last analysis, I would beg the Government to take time by the forelock. The pay packets of industry are bound to lessen and the cost of living is bound to increase. I beg the Government to get into the closest consultation with the authoritative bodies of labour in this country. I say: do not wait until the catastrophe is upon you before you move. With those remarks, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.
House adjourned at twenty-four minutes before five o'clock.