Sitting of 10 December 1956

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  PENSIONS AND NATIONAL INSURANCE

    Married Women (Divorce)
    Mr. Doddsasked the Minister of Pensions and National Insurance what consideration is being given to improve the position of divorced women who did not pay contributions whilst married and therefore do not qualify under the present regulations for full-scale retirement pension.
    The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): A recommendation dealing with this matter is contained in the Report of the National Insurance Advisory Committee on the question of contribution conditions and credits provisions which I recently presented to Parliament (Cmd. 9854). I am at present considering this together with the other recommendations of the Committee.
    Mr. Dodds: Is the Minister aware that there are some very sad cases in this
    2
    category, and will he, under all the circumstances, be as sympathetic as possible?
    Mr. Boyd-Carpenter: I must not prejudge any statement which I make on the recommendations as a whole, but I am bound to say that I have a good deal of sympathy with this recommendation.

    Retirement and Old-Age Pensioners
    Mr. Hector Hughesasked the Minister of Pensions and National Insurance if he will arrange to have paid to every old-age pensioner at Christmas week a bonus in the form of an extra week's pension in order, for that week, to mitigate the hardships old-age pensioners suffer from the present high cost of living.
    Mr. Shurmerasked the Minister of Pensions and National Insurance if he will consider giving a bonus of £1 to old-age pensioners for Christmas to enable them to buy a little of the season's luxuries.
    Mr. Boyd-Carpenter: While I understand and sympathise with the feeling which prompts these Questions, I think the hon. Members will, on reflection, appreciate that such payments would not be appropriate to a compulsory contributory insurance scheme, and it is no doubt for that reason that the National Insurance Acts give no authority for the making of such payments.
    Mr. Hughes: Does the Minister realise—as I am sure he does—that there are exceptional reasons why some extenuation should be granted to old-age pensioners?

    3
    One reason is that their incomes have not been equated to the high cost of living as have the incomes of other classes in the community and another reason is that they have less time than anyone else in which to enjoy their incomes.
    Mr. Boyd-Carpenter: The hon. and learned Gentleman will appreciate that the very large number of retirement pensioners in our present universal scheme covers some people who are in need and some who are very far from being in need. I think that indicates that, whatever other help is forthcoming at Christmas time, the National Insurance scheme, covering inevitably 4½ million pensioners, is not really the proper method.
    Mr. Shurmer: Whatever the Minister might think that the National Insurance Acts are doing, is he not aware—and he must be aware—that all the year round these old-age pensioners are merely existing and not living, and that for many of them this will be their last Christmas on earth? Does not the right hon. Gentleman think that they are entitled to a little luxury during the Christmas season, and could he not find something for these pensioners who, in the past, have brought about many of the privileges which the younger people enjoy today?
    Mr. Boyd-Carpenter: I am glad to say that local and voluntary effort does a great deal at Christmas time to help those of these people who are in need. I would say to the House, with respect, that the view which has been universally taken by my predecessors, that the National Insurance scheme itself is not the proper method of doing what most of us would like to see and hope will be done for these people at Christmas time, is right.
    Mr. Hector Hughesasked the Minister of Pensions and National Insurance how much it would cost to pay to every old-age pensioner a bonus of £1 a week in Christmas week.
    Mr. Boyd-Carpenter: About £5 million.
    Mr. Hughes: Does not the Minister think that £5 million would be better spent in this way than on wildcat warlike schemes which merely increase the national debt, and will the right hon. Gentleman approach his colleagues in the Government with a view to seeing that this £5 million is spent in this very desirable way?
    Mr. Boyd-Carpenter: I have said what I have to say on the use of the National Insurance Scheme for this purpose. I am bound to add that I do not think the hon. and learned Gentleman's attempt to drag in extraneous matters helps very much.
    Mrs. Jegerasked the Minister of Pensions and National Insurance what action he proposes to take to safeguard the welfare of pensioners who will be subjected to rent increases as a result of the Government's proposals.
    Mrs. Slaterasked the Minister of Pensions and National Insurance what action he proposes to take to assist old-age pensioners, widows, and others, in view of the increase in prices of essential foods.
    Mr. Boyd-Carpenter: I would refer the hon. Members to the replies which I gave to the hon. Member for Blackburn (Mrs. Castle) and to other hon. Members on 3rd December.

    Cost of Living
    Mr. McKayasked the Minister of Pensions and National Insurance what was the cost-of-living index figure on 16th November, 1954, fifteen days before it was decided pensions should be raised; what is the cost-of-living index figure now; what is the percentage increase; if he is aware that the general outlook indicates a further rise in the cost of living; and if he will consider increasing the insurance pensions.
    Mr. Boyd-Carpenter: On 16th November, 1954, the Interim Retail Prices Index stood at 144·7. On 16th October, 1956, the corresponding figure was 157·5, a percentage increase of 8·8 per cent. As regards the remainder of the Question, I would refer the hon. Member to the replies which I gave on 3rd December to the hon. Member for Blackburn (Mrs. Castle) and other hon. Members, to which I have nothing to add.
    Mr. McKay: Is it not correct to say that if pensions were raised it would be largely a matter of transferring money from one section of the community to another and would, therefore, have no effect on the inflationary position? If that is so, what is the Government's reason for refusing to increase pensions in order to raise the status of these poor people to something more equivalent to that of the rest of the community?
    Mr. Boyd-Carpenter: If I were to deal with the hon. Gentleman's point about inflation, I am afraid that I should take a very long time indeed, but, on the figures for which he has asked, the cost of living over the period he selected has risen 8·8 per cent., as I told him, whereas the rate of pension has risen 23 per cent.
    Mr. Redhead: Will the right hon. Gentleman reconsider the basis of his answer to this Question in relating it to the Index of Retail Prices? is he not aware that the Cost-of-Living Advisory Committee has made it abundantly clear that the Index of Retail Prices is not necessarily applicable to the cost of living of any particular section of the community and, furthermore, that the Index of Retail Prices definitely excludes from consideration the budgets of those who are dependent either wholly or substantially upon old-age pensions and National Assistance.
    Mr. Boyd-Carpenter: That may well be so, but I was answering a Question by the hon. Member for Wallsend (Mr. McKay), which asked for that figure.

    Earnings and Pensions
    Mr. McKayasked the Minister of pensions and National Insurance why the money value of pensions compared with the prevailing earnings of workmen is so much greater now than in 1946; what is the difference from this angle between the two periods; and if he will consider these factors when he considers pensions in future.
    Mr. Boyd-Carpenter: I think the hon. Gentleman is under some misapprehension. I would refer him to the figures relating to this matter which I gave him on 3rd December. In any event, the level of earnings of manual workers is only one of a number of factors which has to he taken into account in connection with National Insurance retirement pensions.
    Mr. McKay: Is it not correct, apart from the question of the workers themselves, that the income of the whole general community has risen tremendously since 1946, that dividends have risen by 82 per cent., national income by 80 per cent. and undistributed profits by about 190 per cent., so that the general money rise of incomes throughout the country has been extravagantly increased while pensions have been raised
    6
    by only 5 per cent.? It is a scandalous position, and I am quite sure that the Government are not the friends of the aged people in the attitude which they are adopting at the present moment.
    Mr. Boyd-Carpenter: On the last part of the Question, as the hon. Gentleman knows, the real value of pensions today is better than that when his right hon. Friends raised it in 1951, and if there is any question of friendship for that section of society, our claim is considerably better than theirs. The figures which he gave rather rapidly were, I think, figures of money income. The true test is the real value, and that is what is applicable both to pensions and other matters.

    Unemployment Benefit
    Mr. Doddsasked the Minister of Pensions and National Insurance if he will take the necessary action designed to increase scales of unemployment benefit in view of the indications that the Middle East situation will adversely affect employment and the cost of living.
    Mr. Allaunasked the Minister of Pensions and National Insurance if, in view of the increased unemployment likely to be caused by the oil and petrol shortage and by the general aftermath of the armed conflict in Egypt, he will consider raising unemployment benefit from its present level of £2 a week for a single person.
    Mr. Boyd-Carpenter: Differential benefit rates such as are proposed in these Questions would be contrary to the accepted basis of the National Insurance Scheme.
    Mr. Dodds: Would the right hon. Gentleman say which is the proper quarter in which to raise this matter, because is it not a fact that the cost of living has gone up substantially since the scales were fixed and, in view of the fear for the immediate future, surely he or someone else will do something about this important matter?
    Mr. Boyd-Carpenter: What the hon. Gentleman's Question relates to is a proposal to deal separately with the rates of unemployment benefit. If he studies the Beveridge Report he will see a clear criticism of the danger of having unemployment benefit raised above sick benefit

    7
    rates, with the result that people not fit to work would be struggling down to register.
    Mr. Allaun: Then why cannot the Minister raise all the benefits? Does he realise that £2 a week total for old-age pensions or any other benefit leaves, in many cases, less than 2s. a day for food, and many men and women who will not go on National Assistance will go hungry in Britain this winter through no fault of their own? Cannot he therefore raise all the benefits?
    Mr. Boyd-Carpenter: The Question relates to unemployment benefit rates separately. I have already dealt with the main issue in a number of answers.

    War Disabled Pensioners
    Dr. Kingasked the Minister of Pensions and National Insurance the numbers of war disabled pensioners who will qualify for the new ageing allowance in February, 1957; and the estimated numbers of new and of expiring awards in a full year.
    Mr. Boyd-Carpenter: It is estimated that about 61,000 war disablement pensioners will qualify for the allowance in February next and that in the next full year 8,000 new awards will be made. I do not feel able, for reasons which I hope the hon. Gentlemen will understand, to give any figure for the number of awards which are likely to cease to be payable during the period mentioned.
    Dr. King: While congratulating the Minister on the new allowance that he has made to ageing ex-Service men, may I ask him if he is aware that the annual cost of the concession is almost offset by the number of old ex-Service men who have died? That being so, will he give serious consideration to the request of B.L.E.S.M.A. and members of the all-party Committee for improvements before he actually signs the Royal Warrant making the increase?
    Mr. Boyd-Carpenter: The hon. Gentleman, who I know has followed this matter very closely, will recall that I gave the reasons last week why, after careful consideration, we thought it right to concentrate the sum of money available where the need is greatest, and that is, so far as this allowance is concerned, where the combination of age and the
    8
    assessment of disablement was highest, while dealing with the problem of the most seriously disabled younger men by improvements in the comfort allowances.
    Dr. Kingasked the Minister of Pensions and National Insurance if he will make a graduated reduction of the present qualifying age of 65 years for the new ageing allowance for war disabled pensioners to allow those who are 100 per cent., 90 per cent. or 80 per cent. disabled to qualify for the allowance at an earlier age than 65 years.
    Mr. Boyd-Carpenter: As the hon. Gentleman may be aware, I explained in answer to Questions on 3rd December why I do not think it is possible to extend further the improvements in war pension provisions which I announced on 19th November.
    Dr. King: The Minister has given this afternoon the figure of 61,000 aging ex-Service men who will benefit. Is he aware that there are some 55,000 more who will not benefit and are disappointed that the age was not lower? The proposal made in the Question would at any rate bring the most deserving categories of 80 per cent., 90 per cent. and 100 per cent. aged ex-Service men into benefit a little sooner than 65. Will he give this matter sympathetic consideration?
    Mr. Boyd-Carpenter: I appreciate the point which the hon. Gentleman has made, but I think it will be well to recognise that the improvements in these allowances where no age factor arises are designed to give help to those most seriously disabled cases under 65 whom, I know, he has particularly in mind.
    Mr. Simmons: Will the Minister, in view of the fact that this will be contained in a Royal Warrant and is therefore unlikely to be discussed in this House, consider the position again before he presents the Royal Warrant, because, as his own figures show, these men are dying at a very high rate every year and to bring the age down to 60 would, I think, meet the case much more effectively than 65? Will he also consider that the man with 90 per cent. disability gets 5s. less than the man with 100 per cent. disability, and cannot he graduate it on the basis of the proportion of disablement—this would work out at 1s. 8d.

    9
    at each stage—which would not leave the gap between 90 per cent. and a 100 per cent. disability?
    Mr. Boyd-Carpenter: As to the last part of the hon. Gentleman's question, I have, of course, considered while going into this matter all the various possible ways of doing it. I do not altogether like the hon. Gentleman's proposal for exact graduation, which proposes a much more elaborate system and one more apt to be upset if any change in the assessment took place. So far as the difference between 90 per cent. and 100 per cent. is concerned, the hon. Gentleman will have in mind that 100 per cent. covers a great many cases in which the disability in total is a great deal more than 100 per cent. and some preference for 100 per cent. is desirable. On the first point, I did consider this matter—I always pay attention to what the hon. Gentleman says—and I think that these proposals should go forward in the Royal Warrant as already announced.
    Mr. Hector Hughesasked the Minister of Pensions and National Insurance if he will state, in tabular form, how many veterans of World War I are excluded from the comforts allowance, extended comforts allowance, and ageing allowance, respectively, because they have not reached the age of 65 years, giving the nature and percentage of disability in each case, and the amount of pension each such person is now entitled to.
    Mr. Boyd-Carpenter: There is no age condition for the awards of the comforts allowances, and the remaining parts of this Question do not therefore arise so far as this allowance is concerned. As regards pensioners of the 1914 War who will not qualify for the new allowance because they have not yet reached 65, I regret that information as to the precise nature of the disability and the amount of pensions and allowances in each case is not immediately available. I will, with permission, circulate in the OFFICIAL REPORT the estimated number, analysed by pension assessment.
    Mr. Hughes: As the number of men under 65 who do not get benefit under this new scheme of the Minister's is very small, can he indicate any reason in ethics or justice why that small number of men,
    10
    who were war heroes in the First World War, should be excluded from the benefit?
    Mr. Boyd-Carpenter: I disagree with the hon. and learned Gentleman in saying that the number of war disabled from the First World War who are under 65 is small. The number is, of course, substantial. I would refer the hon. and learned Gentleman to the answer which I gave a few minutes ago to his hon. Friend the Member for Itchen (Dr. King).
    Mr. Chetwynd: Will the Minister look at the question of war pensioners who will be receiving this new allowance—for which they are grateful—and are in receipt of National Assistance? As I understand it, their National Assistance grant will be decreased and they will be no better off as the result of the new award.
    Mr. Boyd-Carpenter: Proposals to deal with National Assistance disregards are quite separate and, as the hon. Gentleman knows, would require legislation.
    Following is the estimated number:

    Disability assessment.

    Estimated number of 1914 War pensioners under 65 years of age, and assessed at 40 per cent. or more.

    per cent.

    100

    …

    9,000

    90

    …

    1,000

    80

    …

    5,000

    70

    …

    7,000

    60

    …

    11,000

    50

    …

    17,000

    40

    …

    17,000

    Total

    …

    67,000

    Mr. Wilfred Palingasked the Minister of Pensions and Nations Insurance the number of disabled ex-Service men who have sufficiently recovered from pulmonary tuberculosis to be assessed at less than 20 per cent. disability.
    Mr. Boyd-Carpenter: I regret that this information is not available, bust pensions of 20 per cent, or over for pulmonary tuberculosis were re-assessed at less than 20 per cent. in 1,980 cases in the twelve months ended 30th September, 1956.
    Mr. Paling: When the Minister is looking into these cases, and particularly those of men who appear to have so far recovered that their pensions are discontinued, will he have regard to the fact that

    11
    it is still difficult for a man who is known to have had tuberculosis to get a job, not only outside but inside the Civil Service? If one Ministry can decide that a man has sufficiently recovered not to need a pension, surely that should not be counted against him when he is applying to other Ministries for employment?
    Mr. Boyd-Carpenter: I have a lot of sympathy with the right hon. Gentleman's point of view. I do not know whether he has any particular case in mind. Even after a pension on low assessment, under 20 per cent., has been withdrawn, the welfare officers of my Department, as the right hon. Gentleman knows, will do their best to help the men concerned with such problems as employment.

    Prescription Charges
    Mrs. L. Jegerasked the Minister of Pensions and National Insurance if he will publish the scales by which the National Assistance Board has to determine eligibility for refund of prescription charges.
    Mr. Boyd-Carpenter: The scales are those set out in the current National Assistance Regulations.
    Mrs. Jeger: Could the Minister take any steps to make the main outline of the scales more widely known to people who feel that they are just above the borderline of these prescription charges? Could he issue a more popular form of leaflet?
    Mr. Boyd-Carpenter: My impression is that the leaflet setting out the scales is pretty clear and pretty well known. I will certainly look into the hon. Lady's proposal.
    Lieut.-Colonel Liptonasked the Minister of Pensions and National Insurance whether he will make vouchers available to recipients of National Assistance so as to obviate the need for refunding to them the cost of prescriptions.
    Mr. Boyd-Carpenter: I am informed by the National Assistance Board that this proposal was, on consideration, not regarded as practicable.
    Lieut.-Colonel Lipton: Is the right hon. Gentleman aware that many hundreds of people just cannot afford to lay out the few shillings involved? To some of them, it will mean leaving their prescriptions until the day on which they
    12
    draw their weekly amounts? Is it not possible to have vouchers available at post offices or surgeries on which the chemists could claim the prescription charges, rather than put the onus on to the unfortunate applicant?
    Mr. Boyd-Carpenter: The hon. and gallant Gentleman will be aware that my right hon. Friend the Minister of Health has taken steps to improve the procedure for claiming reimbursement, and in particular for enabling it to be claimed on the day of payment without waiting for the day of payment of National Assistance. These are matters on which the hon. and gallant Gentleman will no doubt want to put Questions to my right hon. Friend the Minister of Health.
    Mr. Warbey: Is the Minister aware that coal miners in an advanced state of pneumoconiosis are having to pay as much as 5s. per week for prescription charges? Will he not consider authorising the National Assistance Board to issue a regular prescription allowance for chronic invalids?
    Mr. Boyd-Carpenter: That would appear to be a matter more for my hon. Friend the Minister of Health than for myself, and certainly it has nothing to do with the Question on the Paper.
    Mr. W. R. Williams: The Minister says that the proposal is impracticable. Some of us find it very difficult to understand that. Will he give us some of the reasons?
    Mr. Boyd-Carpenter: Certainly. First of all, to issue a large number of vouchers, as is proposed in the Question, to recipients of National Assistance would involve a very considerable production of paper and the production of vouchers the use of which it would be very difficult to control.

    National Assistance (Lewisham and Carmarthen)
    Mr. Lewisasked the Minister of Pensions and National Insurance the number of people in the Parliamentary Constituency of Lewisham, North who were, at the latest convenient date, on National Assistance; and how these figures compare with a similar date over the last five years.
    Mr. Boyd-Carpenter: I regret that separate figures are not available for the Parliamentary Constituency of Lewisham, North. The local area office of the National Assistance Board serves the whole of the borough of Lewisham, which, as the hon. Gentleman may be aware, also includes the Constituencies of Lewisham, West, and Lewisham, South.
    Mr. Lewisasked the Minister of Pensions and National Insurance the number of people in the Parliamentary Constituency of Carmarthen who were, at the latest convenient stated date, on National Assistance; and how these figures compare with a similar date over the last five years.
    Mr. Boyd-Carpenter: I regret that separate figures are not available for the Parliamentary Constituency of Carmarthen, parts of which are served by no fewer than five area offices of the National Assistance Board.
    Mr. Lewis: If I put the five constituencies down on this Question and the previous Question, will the Minister get the reply to it?
    Mr. Boyd-Carpenter: No. The hon. Gentleman has misunderstood my answer. It is not a question of five constituencies but of five area offices of the National Assistance Board.
    Mr. Lewis: The Minister misunderstands my supplementary question. If I put a Question down, including the five areas which cover the five constituencies, will he give me the answer to the Question?
    Mr. Boyd-Carpenter: It is most likely that I shall be able to do so. I did not misunderstand the hon. Gentleman's supplementary question. The word "constituency" crept in, for reasons which I fully understand.

  FUEL AND POWER

    Gas Industry (Ex-Municipal Employees)
    Captain Duncanasked the Minister of Fuel and Power whether he is now in a position to announce his approval of the scheme for an increase in pensions of ex-municipal gas employees submitted to him by the Gas Council.
    Sir I. Clark Hutchisonasked the Minister of Fuel and Power if he will now make regulations under the Gas Act, 1948, to give ex-municipal pensioners benefits similar to those conferred on other retired local government officers by the Pensions (Increase) Act, 1956.
    The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. David Renton): I cannot yet add to the answer that my right hon. Friend gave to my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) on 3rd December.
    Captain Duncan: When will my hon. and learned Friend be able to add to that answer? Is he aware that there are similar people who are still pensioners of local authorities and have not been the victims of nationalisation? They have received their increase, with effect from 1st April. These people in my Question are still waiting. Will my hon. and learned Friend be able to make a statement before Christmas?
    Mr. Renton: This is a most complicated matter, in which various Departments are concerned. It would be quite wrong for me, in view of the consultations which have to take place, to fix a date when I could give my hon. and gallant Friend a definite reply.
    Sir I. Clark Hutchison: Arising out of that rather unsatisfactory reply, may I ask my hon. and learned Friend to endeavour to make this decision before the New Year, as the matter has been outstanding for very many months?
    Mr. Renton: My hon. Friend says that the matter has been outstanding for a long time, but in fact the proposals reached my right hon. Friend only in October. Various parties have to be consulted, and I could not give an undertaking that a decision will be reached before Christmas.
    Mr. Shurmer: Will the hon. and learned Gentleman consider also the question of pensioners from municipal electricity undertakings who are in the same position as pensioners mentioned in the Questions? This question has been outstanding for a long time, and these people are suffering too.
    Mr. Renton: That is another question.

    Petrol and Oil (Prices)
    Mr. Doddsasked the Minister of Fuel and Power, in view of the difficult oil situation arising from events in the Middle East, if he will give consideration to the introduction of price control in an effort to keep down to the minimum an increase in the cost of living.
    Mr. Rankinasked the Minister of Fuel and Power if, in view of the recent rise in the price of petrol imposed by the petrol companies, he will now introduce price control.
    Lieut.-Colonel Liptonasked the Minister of Fuel and Power why he will not control the price of petrol.
    The Minister of Fuel and Power (Mr. Aubrey Jones): In accordance with their undertaking, representatives of the oil companies and the retail trade consulted me before increasing their prices last week, and I found that these emergency surcharges were necessary. Similar arrangements for consultation made statutory price-control unnecessary both during the last war and after, and I hope they will make it unnecessary again.
    Mr. Dodds: Is the Minister aware that this Question was on the Order Paper before the savage increases in prices for petrol and oil? Since it is now obvious that the Government are not concerned with keeping down the cost of living, I apologise to the right hon. Gentleman for troubling him with this detail.
    Mr. Jones: I fail to see the connection between the two points and the hon. Gentleman's Question. The fact is that I have approved certain emergency surcharges on the price of oil. I am satisfied that those emergency surcharges are not in any way being exceeded.
    Mr. Rankin: Is it really fair to protect the interests of the producer and the retailer while leaving the consumer exposed to the free play of the black market? What is he going to do about persons who have put themselves outside the scheme because they possess private tanks in which they can store great quantities of petrol?
    Mr. Jones: As for the producers, they have incurred increased costs in securing extra quantities of oil from other sources. I think it only right that that should be
    16
    reflected in the price. As to the consumer, I have no evidence that he is being subjected on any scale to a black market. The last part of the question, about petrol tanks, raises a different issue altogether.
    Mr. Nabarro: May I ask two questions arising out of the answer? First, under what powers does my right hon. Friend control the price of petrol and associated products? Secondly, can he give the House an assurance that, having approved the increased prices for the purposes to which he has referred as an emergency measure, when the emergency is over the price will come down again?
    Mr. Jones: In reply to the first part of that question, I have no power at present to control the retail prices of oil products. Under the Emergency Regulations I may assume such a power, a power I am free to exercise should I wish; but I see no reason as yet to call upon it. I am sorry, but I have forgotten the last part of the supplementary question.
    Mr. Nabarro: I asked: when the emergency is over, will my right hon. Friend take steps to see that the prices come down?
    Mr. Jones: It was made perfectly clear by the oil companies that the increases were an emergency surcharge, and they were approved on that basis. I have every reason to believe that when the emergency is over the emergency surcharge will disappear.
    Lieut.-Colonel Lipton: Is the right hon. Gentleman aware that many people regard the extra 5d. imposed by the oil companies as a rather nasty piece of profiteering on their part?
    Mr. Nabarro: Certainly not.
    Lieut.-Colonel Lipton: In order to clarify the position, will the right hon. Gentleman produce detailed figures to show how or to what extent this extra 5d. is really justified by the extra costs?
    Mr. Jones: I take it that the hon. and gallant Member wants to see extra oil arriving in this country to make good, in part at least, the deficit in supplies from the Middle East.
    Lieut.-Colonel Lipton: But not extra profits.
    Mr. Jones: In this case the extra costs incurred in getting increased quantities of oil from other sources must clearly be met. It is to cover those increased costs that the emergency surcharge has been approved.
    Air Commodore Harvey: Can my right hon. Friend say what is the actual cost of bringing oil round the Cape, or from elsewhere other than through the Canal? Does he recall that on 12th September the Leader of the Opposition said that the cost of bringing it round the Cape or from other parts of the world would be only 1d. a gallon extra?
    Mr. Jones: The extra cost of bringing Middle Eastern oil round the Cape rather than through the Canal is about £2 10s. 0d. a ton. [HON. MEMBERS: "How much a gallon?"] That, however, is not the only extra cost incurred. The extra oil from the Western Hemisphere costs much more than Middle Eastern oil—
    Lieut.-Colonel Lipton: How much more?
    Mr. Jones: That depends entirely on the source, and 5d. surcharge takes into account both those increased costs.
    Mr. Rankin: In view of the unsatisfactory nature of the Answer, I beg to give notice that I will try to pursue this matter later during this day's proceedings.

    Middle East (Oil Pipelines)
    Mr. Philips Priceasked the Minister of Fuel and Power whether, in view of the unstable political condition of Syria, he will take steps to encourage the construction of oil pipelines alternative to the ones now destroyed from Iraq through Turkish territory to Iskanderan.
    Mr. Aubrey Jones: The Iraq Petroleum Company has already carried out a reconnaissance of a possible pipeline route from the oilfields of Northern Iraq through Turkish territory to the Mediterranean seaboard. I understand that the results of this reconnaissance are favourable to the construction of such a pipeline. My Ministry is in close touch with the company, which is fully aware of the potential importance of this matter.

    Fuel Economies, Scotland
    Mr. Emrys Hughesasked the Minister of Fuel and Power what estimate he has made of the weekly amount of petrol and oil fuel that will be saved in Scotland as a result of rationing.
    Mr. Aubrey Jones: The approximate weekly tonnages expected to be saved in Scotland by petrol rationing and the other restrictions I have announced are:

    Motor Spirit

    …

    2,000

    Diesel fuel for road vehicles

    …

    600

    Fuel Oil

    …

    1,500

    Gas/Diesel oil

    …

    1,000

    Hon. Members: Pints or gallons?
    Mr. Hughes: Is the Minister aware that those figures show that great hardship will be inflicted on the people of Scotland as a result of his rationing proposals? Does he realise that fuel rationing is a much greater hardship to people living in rural districts in Scotland than to those in suburban districts in the south of England? Will he examine the case with a view to giving people in Scotland an extra ration?
    Mr. Jones: In response to the interjections which prefaced the supplementary question, the figures I gave were weekly tonnages. In reply to the hon. Member's question, it never crossed my mind before that the Scots were less public-spirited than others who live in these islands. As a matter of fact, restrictions suffered in Scotland are not quite so severe as in the rest of the country, and not nearly so severe in regard to fuel oil.
    Mr. Lee: Can the right hon. Gentleman explain why it is stated on the front of the book of coupons:
    "This book is the property of His Majesty's Government."
    Was it anticipated as long ago as that?
    Mr. Jones: It is not quite apparent what connection there is between that question and Scotland.

    Crude Oil (Storage Capacity)
    Mr. Leeasked the Minister of Fuel and Power what efforts he proposes to make to ensure a substantial increase in the storage capacity for crude oil in this country.
    Mr. Aubrey Jones: Storage capacity has increased steadily in recent years in keeping with the increase in refinery capacity. The Suez crisis has underlined the need for a still greater expansion and plans are under active consideration.
    Mr. Lee: Would the right hon. Gentleman agree that, whether the fuel is coming through Suez or round the Cape, one of the lessons which has to be learned is that we certainly need a vast increase in storage capacity in Britain? Will he ensure that the Chancellor does not impose credit restrictions on that development?
    Mr. Jones: I certainly agree with the first part of that supplementary question, and I should have thought that my main answer made that perfectly clear.

    United States Forces, United Kingdom (Oil Supplies)
    Mr. Teelingasked the Minister of Fuel and Power what percentage of the total annual import of petrol to this country is for the consumption of the United States forces; and what steps are being taken to make sure that this amount is not included in the United States new allocation for Europe.
    Mr. Nabarroasked the Minister of Fuel and Power what arrangements he is making to ensure oil supplies of all kinds to United States forces in Great Britain; and whether members of those forces are rationed for oil and oil products.
    Mr. Hamiltonasked the Minister of Fuel and Power what consultations he has had with the United States forces now in Britain with a view to economising in the consumption by those forces of petrol and oil obtained from British sources.
    Mr. Aubrey Jones: For security reasons, I am unable to give any figure for the proportion of our total supplies of petrol that are consumed annually by United States forces in the United Kingdom. Appropriate arrangements have been made to ensure their essential supplies to the United States forces, who are making significant savings in their consumption of all petroleum fuels. Members of these forces will be rationed in respect of petrol for their private cars like anyone else. As regards supplies to Europe, there is no question of any allocation by the United States.
    Mr. Teeling: Does my right hon. Friend realise that many of us feel, in view of the fact that the United States has shown how unwilling it was to help us in our problems in the last few weeks,—[HON. MEMBERS: "Oh."]—he should reconsider the presence of these people in this country? Will he make sure that if it is to look after its own forces—which are here to protect the United States and not necessarily us—[HON. MEMBERS: "Oh."]—the United States will do all it can to pay for this itself?
    Mr. Jones: In answer to that question, may I say that nobody could have been more co-operative in this respect than the commanders of the United States forces.
    Mr. Nabarro: Whilst recognising that the United States might have been cooperative in economising with the consumption of petroleum products for its forces in this country, is it not propitious to ask whether we are buying large quantities of American oil for dollars, and why should we supply the United States of America and its forces' requirements in this country with petrol and petroleum products bought for dollars? Why can they not bring in their own and pay for it themselves?
    Hon. Members: Withdraw.
    Mr. Jones: The United States forces pay to us dollars for the oil consumed in this country.
    Mr. Callaghan: Does not the Minister agree that the venom and spleen shown by the question of the hon. Member is quite unworthy in view of the answer that has just been given? Is he aware that we on this side of the House entirely dissociate ourselves from the sentiments expressed in this question?

    Taxicabs (Petrol Supplies)
    Mr. Teelingasked the Minister of Fuel and Power whether he is aware that the allocation for petrol for the Streamline taxicabs of Brighton is to be gallons per day, when their normal consumption is eight gallons per day; whether he is also aware what unemployment and dislocation this cut will cost; whether this is in proportion to cuts for taxicabs throughout the country, and especially in London; and if he will give instructions to ensure that such cuts are equally applied throughout the country.
    Dr. Kingasked the Minister of Fuel and Power whether he will increase his proposed allowance of petrol for taxicabs to at least that granted to the taxi industry during the war.
    Mr. McLeavyasked the Minister of Fuel and Power whether he has considered the petition from the Bradford Taxi Owners' Association relating to the supplementary allowance for hackney carriages; and what further steps he can take to meet the claims of hackney carriages.
    Mr. J. Howardasked the Minister of Fuel and Power whether he will suitably increase the allowance of petrol for taxis in Southampton and other ports where taxi services are an essential part of the port facilities.
    Miss Baconasked the Minister of Fuel and Power what is the supplementary allowance for a London taxi and for a Leeds taxi of the same horse-power.
    Mr. Aubrey Jones: I have received representations on behalf of taxi services in several areas. The general question of allowances to provincial taxis is under consideration, and I will announce my decision as soon as possible.
    Mr. Teeling: Will my right hon. Friend tell us also why it is that London seems to be getting so much more petrol than are the provincial towns? Is he aware that, in the particular case of my own division at Brighton, the Christmas holiday season is a very valuable and important one? Does he realise that next week taxi drivers are to be sacked because no decision has been reached on the subject? Does he further realise that some of the hotels are three or four miles from the station, that the taxis have to get back to the station, and that far more petrol is being used in that way? Will he be willing to receive a deputation to discuss this matter?
    Mr. Jones: Taxis, after all, are not put to quite the same use in provincial cities as in London. [HON. MEMBERS: "Why not?"] In fact, under the last scheme, the allocation made to provincial taxi services was not as great as that given in the case of London. The final allocation to provincial taxi services has yet to be made, but, in the light of my hon. Friend's comments, I certainly
    22
    appreciate the urgency of the position, and I will make a decision as soon as I can.
    Mr. Callaghan: Before the Minister commits himself to a comparison between London and the provinces, will he keep in mind the fact that many provincial taxicab drivers hold the view that they have to return empty much more often than have the London drivers, who cruise and pick up their passengers? If he is convinced, as many taxi drivers are, that they will be driven off the roads unless they get better supplementary supplies, will he undertake to this House to give these people sufficient petrol to enable them to continue to earn a living?
    Mr. Jones: In answer to the first part of the hon. Member's supplementary question, the relative needs of provincial and London taxis are under consideration in an attempt to assess their needs. I have to assess these at their proper value and, in the light of this, to come to a decision. As to the second part of the hon. Member's supplementary question, I have, on various occasions, made it perfectly clear that, where livelihood is threatened, special consideration will be given. Having regard to this, as we hope, temporary or emergency rationing scheme, that is perfectly proper.
    Mr. J. Howard: Is my right hon. Friend aware that, in ports such as Southampton, where there is no alternative means of transport, the taxi services need very special consideration, since the sailings of liners and steamers are determined by the tides and not by the hours at which public transport runs?
    Mr. Jones: I will certainly bear that consideration in mind in coming to my decision. I am glad to be reinforced in the view that the needs of different provincial cities do, after all, differ one from another.
    Dr. King: Is the Minister—whose sympathetic approach to the question when we put it to him I appreciate—aware that Southampton taxi men are, up to the moment, to get nine gallons a week; that they tell me that with that allocation they can earn £7 a week, and that many of them have overheads, including the hire of their car, amounting to some £5 a week. Is he further aware that, if the present

    23
    ration stays as it is, the owner-driver will be utterly destroyed and the employers of fleets of taxis will have to dismiss about 75 per cent, of their men before Christmas? Will he treat this as a matter of very real urgency, affecting the livelihood of a small but quite worthy group of men?
    Mr. Jones: I do see that Southampton has claims to be treated as a special category of its own, and I will certainly give my decision with the utmost speed.
    Mr. Dugdale: Does the Minister realise that by stating that there are special uses for taxis in London which, apparently, do not exist in the provincial towns, Birmingham and other towns which have great need of taxis will find themselves in great difficulties? What need is there for a taxi in London which does not also apply in these towns?
    Mr. Jones: I think, Sir, that the right hon. Gentleman had better await my final decision on this.
    Mr. F. Harris: Is the Minister aware, from this and allied Questions, that people's livelihoods are affected and that it is taking far too long to reach a decision; that he should come to his decision very quickly as otherwise it is not fair to the people concerned?
    Mr. Jones: I will, Sir, give a decision very quickly.
    Miss Bacon: Is the Minister aware that in a city such as Leeds, where there is no Underground service as there is in London, there is a very great demand for taxis? He says that the allocations have still to be given, but is he aware that the taxi drivers have already received their allocation, which is about one-third of the amount given to the taxis in London?
    Mr. Jones: They have not yet received their final allocations.
    Mr. Callaghan: Is it not clear from the number of questions asked from both sides that a great many hon. Members have had representations because most taxicab proprietors are extremely concerned about their livelihood? Will the right hon. Gentleman make a statement on this subject tomorrow so that hon. Members may be able to reassure their constituents and the taxicab proprietors will know where they stand?
    Mr. Jones: I think, Sir, that I have gone as far as I can by saying that I will announce the final allocations as quickly as possible. I am afraid that I cannot add anything to that. I am appreciative of the several difficulties caused, but I would ask hon. Members to reflect that the special considerations which they have adduced in the case of quite a large number of cities do, in themselves, underline the difficulties of the problem? But, I repeat, I will reach a final decision very soon.
    Mr. Marlowe: In considering the urgency of the problem, will my right hon. Friend take particularly into account the difficulties experienced in the non-county boroughs, such as Hove? In the case of other corporations of local authorities, the drivers can, to some extent, offset the hardship by getting a rise in fares, but in the non-county boroughs that cannot be done without a byelaw—which requires the sanction of the Home Office—and six or eight weeks may elapse before the increase can be permitted. Will he give special consideration to that aspect of the problem?
    Mr. Jones: I would ask hon. Members to reflect that the longer the list of special considerations that I have to take into account, the more difficult it becomes to reach a speedy decision on this matter.
    Mr. McLeavy: Is the Minister aware that these taxis are just as important in the provincial towns as they are in London, and that particularly in a city such as Bradford, as well as Leeds, they are essential to the communal life of the people? Will he give an assurance that he will make an early statement and allow these men to earn at least a reasonable living?
    Several Hon. Members rose—
    Mr. Speaker: Order.
    Mr. Callaghan: On a point of order, Mr. Speaker. Several hon. Members were still endeavouring to catch your eye on these Questions in which there is a great deal of public concern and interest. May I therefore, through you, and with your permission, ask the Minister, in view of the public interest, if he will undertake to make a statement in the House during the current week so that we may have the opportunity to question him?
    Mr. Speaker: There are over 600 constituencies, and if there are specific needs for all to be urged in Question Time we shall proceed no further. There is also a Prayer tonight which, although I do not know, may be relevant to this matter.
    Mr. Callaghan: There is a Prayer tonight, Mr. Speaker, but, as far as I know, the Minister will not be in a position to make a statement tonight because he said earlier that he would not be in a position to make a statement tomorrow. There is great public concern about this, and it is not limited to purely constituency interest. Is it not reasonable to ask the Minister to say that he will make a statement on the subject before the end of the week?
    Mr. Jones: I do understand the concern there is on this subject, and I will certainly give consideration both to the need for urgent decision and to the best means of making it as widely known as possible.
    Several Hon. Members rose—
    Mr. Speaker: Order.
    Mr. Rankin: On a point of order. Is it in order, Mr. Speaker, for the Minister to ignore the interest of Scotland in this matter?
    Mr. Speaker: That is not a point of order at all.
    Mr. Teeling: Further to that point of order. In view of the fact that many people are being dismissed this week because of—
    Mr. Speaker: Order. The hon. Member can return to this question at another opportunity.

    Motor Fuel Rationing
    Miss Burtonasked the Minister of Fuel and Power if he is aware of the concern felt by management in Coventry that key workers will have difficulty in getting to and from their work because of the shortage of petrol; and whether petrol will therefore be made available for this essential purpose.
    Mr. Aubrey Jones: The basic ration should suffice for most people who cannot get to work by public transport, but I am considering what further assistance can be given to firms whose production would
    26
    be adversely affected by inability of their workers to get to work.
    Miss Burton: Might I ask the Minister if he is aware that Standard Motor Company, which is in my constituency, has more than 4,000 workers going to work each day by car? This does not mean that each owns a car, but some travel with others who do. Is he further aware that the regional fuel office has said that there can be no special issue and the basic allowance must suffice? In view of what he has said, might I ask the right hon. Gentleman if he is aware that the presence of large numbers of workers will put a severe strain on public transport and that factory production will, in fact, be disrupted? Will he look at the matter again as regards Coventry?
    Mr. Jones: I am in touch with the British Employers' Confederation on this, and in these consultations I shall certainly bear in mind the plight of the Standard Motor Company.
    Sir H. Roper: Is my right hon. Friend aware that great concern is felt by many people residing in the countryside, in my very rural constituency, who will be unable to travel to their work? Has he yet given attention to the case of an engineering firm at Wadebridge which is threatened with shut-down because its key men live at such a distance?
    Mr. Speaker: The Question is about Coventry. I do not see how we can bring in every constituency.
    Mr. Hamiltonasked the Minister of Fuel and Power what special allocations of petrol he intends to allow in the contesting of parliamentary by-elections now pending.
    Mr. Aubrey Jones: Appropriate arrangements are being made in consultation with the political parties.
    Mr. Hamilton: Will the Minister give an assurance that nothing will be done in this respect to thwart the expression of public opinion, and would he consider contacting the Conservative Central Office to arrange for the issue of a leaflet explaining why there is a shortage?

    Firms (Oil)
    Mr. Allaunasked the Minister of Fuel and Power the approximate number of British firms now dependent on oil power.
    Mr. Aubrey Jones: The total number is not known, but some 1,500 firms each use for burning 500 tons or more of oil a year and together account for about 85 per cent. of all the oil so used by industry.
    Mr. Allaun: Whilst appreciating the Minister's difficulties, may I ask him whether his reply is not an admission that he does not really know how many firms and how many workers will be thrown idle when oil is cut by 20 per cent. on 1st January? Further, on what grounds could he reply last week that he did not think that serious unemployment was likely to result? This is a vital issue, and we are being left in the dark.
    Mr. Jones: The hon. Gentleman may perhaps be unaware of the fact that a questionnaire is being sent to each of these oil-using firms. When the questionnaires are in, I think I shall be in a better position to assess more exactly the effects which the restriction may have on each one of them.

    Privately-owned Garages (Petrol Supplies)
    Dr. Bennettasked the Minister of Fuel and Power what measures he is adopting to ensure that during the petrol shortage petrol companies are prevented from filling up the tanks of service stations that they own themselves, while leaving privately-owned garages in the neighbourhood short of petrol; and whether he will investigate cases of this kind brought to his notice.
    Mr. Aubrey Jones: My instructions to the oil companies requiring them to restrict deliveries to garages affect company-owned garages and independent ones in exactly the same way.
    Dr. Bennett: Does my right hon. Friend know that there have been complaints—I certainly have received three from widely separated parts of the country—that this practice is going on? Is he aware that this fits in with what is feared to be the line of policy which is being followed in petrol distribution, and will he look into these cases if I refer them to him?
    Mr. Jones: If in these cases the private garage owners, after having explained their troubles to the oil companies, still
    28
    believe that they have a grievance, I shall be very happy to look into the matter.

    Energy Requirements
    Mr. Palmerasked the Minister of Fuel and Power if he will appoint a special expert committee to survey as a matter of urgency the whole national fuel and power situation and report to him on ways and means by which the country's energy requirements can be met in greater degree from indigenous sources.
    Mr. Aubrey Jones: No, Sir. I agree with the hon. Member about the importance of the objective he has in mind, but I do not think it can best be pursued by appointing a committee.
    Mr. Palmer: Does the right hon. Gentleman appreciate that my Question makes what is intended as a very serious and constructive suggestion? In this connection, has he studied the statement made by the Organisation for European Economic Co-operation?
    Mr. Jones: Yes, Sir, I have studied that statement; but I would not regard that statement as constituting a case for the establishment of yet another committee.

  TRANSPORT

    Coal Traffic
    Sir W. Anstruther-Grayasked the Minister of Fuel and Power whether he is now in a position to forecast the extent to which coal traffic can be switched to rail or canal in order to save petrol in road transport.
    Mr. Aubrey Jones: No, Sir, though, as I told the hon. Member last week, a useful beginning has been made.
    Sir W. Anstruther-Gray: But could my right hon. Friend give the House some good round figures to reassure us?
    Mr. Jones: When it is a matter of the future and of prophecy, good round figures are, I should have thought, most difficult things to give.
    Mr. Woodburn: Is the right hon. Gentleman aware that a great deal of this trouble could have been saved if the Government had not denationalised road transport, in which case it could have been done automatically?

  ELECTRICITY

    Nuclear Power Stations
    Mr. Beswickasked the Minister of Fuel and Power if he will now state the steps he is taking to expand and advance the programme for the generation of electricity by nuclear fuels.
    Mr. Aubrey Jones: The future of the nuclear power programme is under urgent review, but I am not yet in a position to make a statement on it.
    Mr. Beswick: is the Minister aware that, whilst there has been a case for review for some months because of the technical progress which has been made, the public is now expecting something in the nature of a "crash" programme in this matter? Can he tell us to what extent availability of nuclear material is a limiting factor in the expansion of the nuclear power programme?
    Mr. Jones: I am aware of the considerations which the hon. Gentleman has adduced, but I would ask him to exercise patience and await the fuller statement I hope to make on this matter?
    Mr. Beswick: Could the Minister tell us to what extent it is a question of the availability of fuel?
    Mr. Jones: It is a question of all kinds of things. That, I am afraid, is why I am unable to make a statement today.

    BROADCASTING (ANTICIPATION OF DEBATES)
    Mr. Bellengerasked the Prime Minister whether he will make a statement on the Report of the Select Committee on the anticipation of parliamentary debates.
    The Lord Privy Seal (Mr. R. A. Butler): I have been asked to reply.
    It has been necessary to sound opinion in various parts of the House, and this is continuing. I hope to give the Government's decision before very long.
    Mr. Bellenger: Will that be before we rise for the Christmas Recess?
    Mr. Butler: I cannot be absolutely certain, because I would rather have another talk with the right hon. Gentleman the Leader of the Opposition first before I come to a final conclusion.

    ANGLO-AMERICAN RELATIONS
    Lieut.-Colonel Liptonasked the Prime Minister what proposals he is making to meet President Eisenhower in the near future.
    Mr. R. A. Butler: I have been asked to reply.
    I would refer the hon. and gallant Gentleman to the reply given to the right hon. and learned Gentleman the Member for Rowley Regis and Tipton (Mr. A. Henderson) last Tuesday.
    Lieut.-Colonel Lipton: If the Prime Minister's efforts to see the President before he returns from Jamaica prove unsuccessful, would it not be desirable for the Lord Privy Seal to seek a personal interview with the President? Are there not many things which he could explain to the President with greater likelihood of success than the Prime Minister or the Foreign Secretary?
    Mr. Butler: I would not accept the inference from the hon. and gallant Gentleman's question, nor would I say that my right hon. Friend is making particular efforts in this direction. His object is to come back to this country at the end of his three weeks' rest. The position about a meeting with the leaders of the American nation, including the President, is a matter which must be left to the heads of the Governments concerned, as I said to the right hon. and learned Gentleman the Member for Rowley Regis and Tipton, who asked the Question originally. Further, I should like to add that there is, I think, a very satisfactory contact which will go on this week between two very prominent American leaders, namely, the Secretary of State and the Secretary to the Treasury, and three of the major members of the British Cabinet, on N.A.T.O.; so there is no lack of contact between the United States and British Governments.

    EGYPT (PAMPHLETS)
    Mr. Leatherasked the Prime Minister what action he is taking in conjunction with the Secretary of State for Foreign Affairs and the Minister of Defence in regard to pamphlets which are being handed by Egyptian officials to British citizens leaving Egypt asserting that atrocities have been committed by British troops in Port Said.
    Mr. R. A. Butler: I have been asked to reply.
    I assume that my hon. Friend is referring to the pamphlet entitled "Scribe". The House will understand that Her Majesty's Government are unable to prevent the distribution of this false and mendacious propaganda which I am sure the recipients themselves have treated with the contempt that it deserves. We are taking every possible step, through all the publicity media at our disposal, to show up the untruths and misrepresentations which this pamphlet contains.
    Mr. Leather: Would my right hon. Friend confirm that the author of this document is in fact not a reputable neutral journalist at all but a man who is both ex-Nazi and ex-Communist, who is known to have betrayed many of his countrymen to the Gestapo during the war and, in fact, is a thoroughly disreputable man?
    Mr. Butler: I think it is important to establish the following facts. He was, first of all, a member of the Swedish Brownshirt (Nazi) Party. He was then a volunteer photographer with the German Army in Finland. Then he was connected with an organisation known as the Red Horse League in Norway, about which I would rather not say any more. He then appears to have been invited to Russia in 1945, and was later arrested by the British authorities in our zone of Germany for masquerading as an American journalist. He was deported to Sweden. In the same year he published accounts of conversations in London with members of the British and Polish Governments, which were later shown to be wholly fictitious.
    Mr. Gaitskell: Can we be told the name of this unpleasant character?
    Mr. Butler: As far as I can pronounce it, it is Per Olow Anderson.

COMPLAINT OF PRIVILEGE
Mr. Wigg: With your permission, Mr. Speaker, I want to raise a question of Privilege. I very much regret that owing to the shortage of time I have been unable to give notice of my intention to the hon. Member for Lanark (Mr. Patrick Maitland). On Saturday morning, there appeared in the Daily Herald a statement attributed to the hon. Member for Lanark, in these terms:
"… one of the Tory M.P.s who abstained in Thursday's vote of confidence in the House of Commons, issued an astonishing statement last night.
He said:
'In view of the extraordinary and unexampled pressures—some of them altogether underhand—which have been used to force Tories into line, I think we did pretty well to have 15 of our number daring to show themselves.'"
As that statement obviously refers to pressures on hon. Members as to how they should vote, I submit that there is a prima facie case of breach of Privilege.
Mr. Speaker: The hon. Member ought to substantiate his complaint by bringing the newspaper to the Table.
Copy of newspaper handed in.
Sir W. Anstruther Gray: Further to that point of order—
Mr. Speaker: It is not a point of order. It is a point of Privilege which has been raised.
Sir W. Anstruther-Gray: Further to that point of Privilege, Mr. Speaker. While you are considering the document, is it not the practice for hon. Members to make every effort to inform other hon. Members whom they intend to attack before raising such matters? While the hon. Member for Dudley (Mr. Wigg) stated that he had been unable to inform my hon. Friend the Member for Lanark (Mr. Patrick Maitland) that he was raising this matter, may I ask the hon. Member what steps he took to inform my hon. Friend before raising it and to give my hon. Friend an opportunity of being in his place to reply to the discussion on the subject?
Mr. Speaker: This is the first notice that I have had. It appears to me to be a complaint founded upon a report in a

33
newspaper about what another hon. Member of the House is supposed to have said. I therefore could not possibly rule on the matter without hearing that other hon. Member, but I rule for the time being, if it is any satisfaction to the hon. Member for Dudley (Mr. Wigg), that he has raised the point at the earliest opportunity; otherwise, I cannot rule on it without hearing what is said. There appears to be no prima facie case of breach of Privilege against the newspaper, anyhow.
Mr. Wigg: I have taken the opportunity of raising the matter at the earliest possible moment, Sir, as I was bound to do, otherwise the matter would have been out of order. I will make every effort—[HON. MEMBERS: "Will?"]—to acquaint the hon. Member for Lanark. I could not do it before because I had only just read the article. Of course, there is no question of Privilege against the newspaper. The breach of Privilege, if there be any, is with the Patronage Secretary and the hon. Member for Lanark.
Sir W. Anstruther-Gray: May we take it, Mr. Speaker, that my hon. Friend the Member for Lanark will be given an opportunity of making a statement on this matter, should he wish, before you give a final Ruling?
Mr. Speaker: I have said that I will certainly consider what the hon. Member for Lanark has to say before I give a Ruling. Whether he wants to make a statement is a matter for him—or for me when I see what the statement is.
Mr. C. Pannell: Further to that point of Privilege, Sir, I should like your guidance. You may remember that a week or two ago my hon. Friend the Member for West Ham, North (Mr. Lewis) raised a question of Privilege, which was referred to the Committee of
34
Precileges. I understand that when you find a prima facie case, it is the duty of the Leader of the House, with the utmost dispatch, to convene the Committee of Privileges. Why should that matter still be left over the head of my hon. Friend? Does not this procrastination in clearing the name of an hon. Member, and removing the odium which is attached to him, rather reflect upon the spirit of the House in failing to protect its Members? Is it not time that the Committee of Privileges was called together? There is considerable feeling on this side of the House about this tardiness to clear the name of my hon. Friend.
Mr. Speaker: It is not a matter for me. I know that the matter of the complaint by the hon. Member for West Ham, North (Mr. Lewis) was referred to the Committee. That is all I know about it.
Mr. J. Griffiths: It is you, Mr. Speaker, who decides from the Chair that there is a prima facie case to go before the Committee of Privileges. Is that not an instruction to the Leader of the House to set up the Committee of Privileges?
Mr. Speaker: I do not think that it is anything to do with the Leader of the House. It is for the Chairman of the Committee, I understand, to summon the Committee.
Mr. Gaitskell: Nevertheless, we would be grateful if the Leader of the House could make a statement, Mr. Speaker. As far as I know, the Committee has not yet met. What are the intentions of the right hon. Gentleman?
The Lord Privy Seal (Mr. R. A. Butler): I was discussing the matter before Questions. I think that there has been delay, but the matter should be proceeded with without delay and I will see that it is.

ORDERS OF THE DAY

  HYDROCARBON OIL DUTIES (TEMPORARY INCREASE) BILL
  Order for Second Reading read.
  3.38 p.m.
  The Chancellor of the Exchequer (Mr. Harold Macmillan): I beg to move, That the Bill be now read a Second time.
  The purpose of this Bill is to give effect to the decision, which I announced to the House last Tuesday, to increase as a temporary measure the Customs duty on imported motor spirit—which means petrol—and other light hydrocarbon oils and also on heavy oils used as fuel in diesel engine road vehicles—that is, the fuel commonly known as derv. The increase is 1s. a gallon, from 2s. 6d. to 3s. 6d. a gallon. The Excise duty on corresponding indigenous oils—that is to say, oils produced from our native materials, such as coal and shale—is also raised by 1s., from 1s. 3d. to 2s. 3d. That is the effect of Clause 1 of the Bill.
  For the purpose of the temporary increase of duty, linked with the present oil shortage, it seems right to take the existing structure of the duty. For that reason, those oils which have hitherto been charged at a rate of 2s. 6d. per gallon are being charged an extra 1s. a gallon, those which are free of duty will remain free of duty and the various preferential margins and reliefs from duty will continue to apply as in the past.
  I have observed a certain amount of misunderstanding, even confusion, about the scope and real purpose of the Bill. I should, therefore, at the outset, like to deal with two points which do not seem to me to have been fully understood.
  First, as to the duration of this increase in the duty. I think that in the excitement of the moment many people somewhat overlooked the important fact that I stated quite deliberately last Tuesday, that this increase is a temporary one. Not only did I emphasise this last week, but the House will see that this intention is reflected both in the title and in the provisions of the Bill. In the normal course of events taxes are imposed by legislation and can be altered or removed only by legislation, but in this case the Bill provides that the increase can be
  36
  brought to an end simply by Order, and that is a very real distinction.
  Some may say that they have heard that story before, and I cannot deny that there are, in our great national picture, many temporary expedients which have survived beyond their expected term. To such sceptics I can only emphasise that I mean what I say and that the Bill has been drawn in this rather special way to emphasise this fact. This is a temporary Measure arising out of the present shortage of oil, and the increase will be applied no longer than is justified on that account. In any case, I shall review this temporary increase, like all other taxation, at the time of the Budget.
  My second point concerns the scope of this tax increase. As I have said, it falls only on certain kinds of oil which are mainly used in road transport and not on oil generally. I have seen references in some newspapers which seemed to suggest that this tax, like the rationing, fell upon all oils. Of course, rationing does but not the tax. That is to say, it does not fall, of course, on oil used in power stations, in factories, for heating office buildings or blocks of flats, and so forth.
  The increased duty does not apply to the heavy oils. Fuel oil, gas oil and kerosene continue to be free of duty. It is quite true that some quantities of the light oils are used for purposes other than road vehicles. For example, small petrol engines have widespread uses in factories, on building sites, and so forth, and, of course, many farm tractors, although, I am told, the minority are still run on petrol; and there are other uses of light oils in industrial processes. However, I repeat that the greater part of the whole range of oil consumption in this country will still be duty free
  Hon Members may ask why it is necessary at present to increase the taxes at all. I would try to explain it in two ways, as objectively as I can, as I tried to do last Tuesday. Put quite simply, temporarily—that is why the tax is temporary—this country has become poorer. The interruption of oil supplies and other disturbances have put an additional, although, I hope, temporary, burden on our balance of payments, and if we are to maintain the position of sterling we must try to live within our reduced income, to consume less at home in order

  37
  to keep imports within bounds and to stimulate exports.
  As I pointed out last Tuesday the recent fall in the gold and dollar reserves is due to lack of confidence throughout the world, and it is right to fortify the reserves by borrowing or by realising dollar assets, but these are stop-gap measures, and the worsening of the balance of payments and the loss of our external income must be permanently made good, and this we must do by our own efforts.
  Mr. A. Woodburn: Will the right hon. Gentleman explain how the Scottish oil producing industry can have an effect on the balance of payments if it is discouraged by this extra tax? It can help in the balance of payments only by continuous existence.
  Mr. Macmillan: The right hon. Gentleman means the shale oil industry? The preference remains the same; the ratio remains the same. I do not think that there will be any discouragement of the production of the shale oil industry by this additional tax.
  Mr. Woodburn: The industry is steadily being closed down. Unless it gets sonic relief the chances are that it will close down altogether before the tax is removed. Will it not be wise to keep the industry going, especially in these circumstances?
  Mr. Macmillan: That is another point. We put up the tax, but that part of the industry, the home production part, is already at a lower rate of tax. In the present circumstances, with oil so much needed, and when we are running on, say. 75 per cent., I should have thought that there would have been a tendency to see an increased production of home oil. However, that is a point of which I take note. It has relevance to one part of this story, although, I think, a minor part.
  I was trying to explain why the additional tax was necessary. I say that we should think ill of ourselves, and should expect others to think ill of us, if we sought to maintain our levels of consumption at the expense of the surplus on our balance of payments. The increase in taxation is, therefore, a contribution towards the necessary reduction in our consumption of our own resources. I am absolutely sure that it is right to
  38
  do this, and I think that the general opinion supports me in the measures I am trying to take to support the sterling area's reserves, for I do not think it is right that, in other words, we should, if I may use the expression, do the whole thing on tick. We ought to do something for ourselves.
  The other point, and, perhaps, a simpler one, is that the present shortage of oil means a loss of revenue from the duty of about £6 million a month, and for all the reasons I have given I could not accept a drop in revenue and in the Budget surplus on this scale. The new duties will make good this loss with a small margin to spare.
  Mr. Gerald Nabarro: I do not think there is any dispute that there will be a loss of revenue, but will my right hon. Friend bear in mind that approximately 75 per cent. of all motor cars on the roads are operated by business firms?
  Mr. J. T. Price: Eighty per cent.
  Mr. Nabarro: It may be 80 per cent. If the cost of petrol is increased by the amount of the additional duty, surely there will, therefore, be a necessary diminution in the yield of Income Tax and Profits Tax on the incomes of those businesses?
  Mr. Macmillan: That, of course, is true of any taxing of one commodity, in the sense that it may affect the total yield elsewhere but it is no reason, I think, why it is not good and sound finance to make good the loss of this tax.
  Mr. Price: The hon. Member for Kidderminster (Mr. Nabarro) has raised a very important issue. Surely all these transactions, the increase in the duty, and in the allowances which are chargeable to the Treasury as to 80 per cent. of all the vehicles on the roads, the additional 5d. per gallon which is being paid to the distributors which will be charged back to the Treasury as to 80 per cent. of the duty, mean that the tax returns of the commercial firms running road transport must be affected?
  Mr. Macmillan: The paradoxical result that what we raise in one duty is bound to produce a reduction of another is not, I think, a reason which

  39
  one can accept for not making an increase. These things have to be evened out. I should doubt whether the total amount reclaimed on behalf of the commercial travellers' expenses would be likely to be larger in the next six months than in the last six months. I should think that it is likely to be smaller.
  If we accept the necessity to make good the revenue, it may well be asked: why should the tax fall upon oil? Why not spread it over a wider range? As I told the House last week, I did consider this. I examined very carefully the possibility of an increase in both direct and indirect taxation, and I explained some of the difficulties in both spheres. Therefore, weighing up all the different considerations, I came to the conclusion that the wisest course, a course in which, I think, the country will see a certain common sense and even justice, was to increase the taxation on the commodity which had become scarce and precious and whose scarcity was itself the cause of the fall in the revenue.
  I do not, of course, expect that this proposal will be popular, but I think that I can claim, after reading very carefully some very interesting and well-informed criticisms, that the broad range and general body of informed opinions approve this decision of the Government and that the majority of the people have understood the reasons behind the proposals and think them sound.
  After having described Clause I and the tax, I should like to say something about the effect which the increase both in the duty and in the commercial price taken together will have on costs and prices generally. I understand, of course, the anxiety which people feel, but I think that there is a certain amount of exaggeration and some misunderstanding and I should like to give the House the facts as best I can find them out. First, there is the direct effect of the increases on the Interim Index of Retail Prices. This index, standing at present at 102·7, contains two items to which the prices of petrol and oil are directly relevant. The first is private motoring, and the second, bus and other fares. I will come to transport costs generally later.
  The whole increase of 1s. 5d. a gallon, that is, the duty and the other price increases taken together, will add about
  40
  one-quarter of a point through the private motoring item to the retail price index. I have no doubt that the rationing of petrol will provide many motorists with enforced savings on this account. It might be said that these will balance up, but that is rather cold comfort. However, I take the pure mathematical argument that if exactly the same amount of money were spent, the increased cost would add one-quarter of 1 per cent. to the index on private motoring account.
  I come to what is, perhaps, more important to the lives of our people—bus fares. The effect will depend, of course, on how far the fares are raised. I will discuss that question on Clause 2. At the moment, I would say only that if all bus undertakings were to raise their fares by the maximum fractions permitted by the Bill—and I am not saying that they will all do so—then, looking at the worst possibility from the point of view of the effect on charges, the resulting increase in the retail price index would be one-fifth of a point.
  On private motoring it would be about one-quarter, and on bus fares, if they were all raised to the maximum allowed, it would be one-fifth. Therefore, the direct effect of the increases in duty and price, through private motoring and bus fares, would be to increase the index at the very most by one half point, or in practice, I think, less. To put it in another way, the increase will be about 1¼d. in the £. These are the direct effects of the duty and price increases on the index, but there will be, of course, the indirect effects, which I will try to put as objectively as I can.
  Mr. Charles Royle: Does the right hon. Gentleman realise that many of the municipal undertakings were already considering increases in fares, because of other charges against them, and that they will now have to face two increases, one immediately after the other?
  Mr. Macmillan: If that is so, that is due to two quite separate circumstances. I am dealing only with the effect of the Bill and I am trying to put it as honestly and straightforwardly as I can.
  The indirect effects, of course, exist, for the cost of transport obviously enters into production and distribution and it is more important in some industries than

  41
  in others. There is no means of telling how far and how quickly any such increases will be passed on to the customer or consumer, but I estimate that about 40 per cent. of oil used as road fuel is used in goods vehicles. The increase in duty and prices in this sector will represent an additional charge on goods transput and on industrial costs at the rate—and I take a year, not, I hope, that it will last a year—of £40 million. If it lasted six months it would be £20 million. In other words, these increases will increase industrial costs generally at the rate of about £40 million a year.
  This, of course, sounds a large sum, but is about one-quarter of 1 per cent. of the gross national product of £17,000 million a year. It can be regarded as roughly equal to a quarter of a point on the retail price index. I do not pretend that these are precise calculations, but they are the best that can be produced by expert statisticians. I say, therefore, with all sincerity that the addition to the cost of living caused by these increases is unlikely to be more than a half-point through direct costs and about a quarter-point through indirect costs. Taking the vast sums over which this £40 million is spread, I think that it will be found that these calculations are about right.
  I hope, therefore, that all sections of the business community will bear these figures in mind and that they will agree that they can be fairly asked to make every effort to avoid reflecting these increases in price increases. They are very marginal and much smaller than other increases in costs of materials which go up and down from day to day. I ask the business community to consider whether it would not be possible to improve efficiency or achieve economies in other costs, or even to absorb the increases in profits for the time being. This is all the more important because, as I have already made clear, this increase in duty is an emergency and temporary measure.
  Mr. F. Beswick; Can the right hon. Gentleman tell us whether the suggestion that these increases in costs should be absorbed into profits was put to the oil companies?
  Mr. Macmillan: The oil companies' increases were very carefully considered,
  42
  and I believe that any impartial examination would prove them to be exactly right.
  There are, of course, cases where, in a particular industry, or for a particular reason, there is no alternative to passing on at least some of the increased costs, but I ask those responsible for fixing prices to make these a minimum and to bear in mind the very small increase concerned, namely, £40 million on a gross national product of £17,000 million. This is a very small increase when related to the total level of economic activity. After all, the Interim Index of Retail Prices has been virtually stable since April and I have shown that the effects of the increase in duty and in the price of petrol is not such as would suggest any significant rise in the cost of living. I hope that these facts will be noted by those who hold responsible positions in industry, whether on the management or on the trade union side.
  The purpose of Clause 2 is to enable those bus operators who need to do so to recoup the added cost which will fall on them because of the increased duty of 1s. a gallon together with the additional increase in the price. This will be a burden on bus operators which many of them are not in a financial position to carry without some increase in fares. The bus operators range from giant concerns like London Transport to quite small separate undertakings.
  I am told that there are 5,000 bus undertakings in Great Britain, many of them quite small. Many of them are doing a job of particular importance in the rural areas, and some of the services are sometimes being operated at a loss or at a very small margin of profit. Too heavy financial impositions upon these operators would, therefore, involve a danger of many country buses being taken off the road, an event which would cause great inconvenience to the public when private motoring is limited.
  The reason for making special provision for bus fares in the Bill is that the normal procedure for obtaining authority to increase the fares—a procedure which is satisfactory in normal conditions and is designed to protect the interest of the traveller—would take too long. I am told that a normal application to the traffic commissioners to vary fares may take several months to decide, not because the

  43
  procedure is dilatory but because it involves the giving of public notice, the lodging of objections, the holding of public inquiries, and all the rest of the procedure which is necessarily fairly prolonged. It would be absurd, therefore, in present circumstances if the request to increase fares to offset the proposed increase of tax was not decided perhaps until this tax had come to an end, which might easily happen under our present procedure.
  Accordingly, this Clause enables the bus operators to make a temporary and limited increase in fares without the need for obtaining further authority. It covers the bus operators throughout the country, and also the London Transport Executive, which provides road and rail services in London. The London transport fares are dealt with in subsection (2) of the Clause. They must be dealt with separately because, as the House knows, they are fixed under a different Act and by a different procedure from that of the bus companies throughout the country. Furthermore, in the case of London it is possible to spread the burden over all the various forms of public transport, that is, buses, coaches, trolley vehicles and the Underground railways. I am sure that this will generally be agreed to be right.
  The Clause permits only a temporary increase of fares and subsection (4) provides that the increase which the operator can make in this way will come to an end a fortnight after the temporary duty is abolished, unless the traffic commissioners—or, in the case of the London Transport Executive, the Transport Tribunal—may for special reasons allow a longer period. A fortnight's grace is obviously necessary so that new tickets may be printed, and so forth.
  A longer period will only be allowed for special reasons; for instance, because an undertaking already has a case before the commissioners for increased fares on some different ground. I think that this covers the point made by the hon. Gentleman the Member for Salford, West (Mr. Royle). It would be foolish to reduce fares and put them up again the next week. This power is merely to prevent something of that kind happening, but, normally, it will end a fortnight after the emergency tax is ended.
  44
  I also said that the increase would be limited in its action. Subsection (3) sets the limit to the increase in fares that may be made under this Clause. In most cases the upper limit is the sum which will increase the operator's aggregate gross receipts from bus fares by one-twelfth of what his receipts would have been at the normal level of fares. That fraction tallies with what I said last week the increase in duty represented. I was not then speaking about increases in commercial prices. I said that the increase in duty represented between one-quarter and one-fifth of 1d. on a 3d. ticket.
  Special provision is made for the small bus undertakings, that is, an operator owning five buses or less, and for small or medium-size undertakings serving country districts. The increase in the duty is bound, on the whole, to be a greater burden on these operators because, of course, the cost of fuel forms a greater proportion of their expenses than in the case of the larger operators. In these cases the limit is accordingly set in the Bill at an increase of one-eighth instead of the one-twelfth for this class.
  I should explain that these fractions of one-twelfth and one-eighth have been set at a level which will not only meet the increased duty, but will also go a little way to meet the increase in price which the oil companies have had to impose. It does not go the whole way, and I do not think it should go the whole way for this reason: as well as adverse factors, there will be some favourable factors. Naturally, there will be factors in the present situation operating in favour of the bus undertakers. The Government feel that it would be only reasonable, therefore, that the operators should be asked to share some of the burden which all of us have to carry.
  Mr. James Callaghan: In the case of a bus company which makes application to the licensing authority for an increase in fares after some of these extra fares have been imposed, will the licensing authority be empowered, in fixing the new level of fares, to take into consideration this increase as well? In other words, may it disallow a part of this increase if it decides that the profitability of the undertaking is above what is reasonable?
  Mr. Macmillan: I do not think that that would be impossible, but I should like to think about it. I gather from the period of time which has been given to me that it is very unlikely that these things would run contemporaneously.
  Mr. Callaghan: My hon. Friend for Salford, West (Mr. Royle) said earlier, and it is fairly well known, that there are a number of undertakings which are now submitting applications for an increase in fares. No doubt this increase will take place before their applications are completed.
  Mr. Macmillan: Yes, if their applications run for four or five months. I hope this emergency will be over before then. However, I will look into that. Obviously, they cannot get the benefit twice over for the same reason. That is only justice. They cannot use the same argument twice over.
  Mr. Callaghan: Those are for a different reason.
  Mr. Macmillan: Then that would be outside this matter altogether. They may have reasons why they should increase fares even if the events of the last four months had not taken place. In that case I have no doubt that the commissioners would deal with the application on its merits.
  Mr. Royle: Does the right hon. Gentleman see the great difficulty in which he is putting the undertakings if they have to go to the public for two increases at different times within a very short period?
  Mr. Macmillan: No, because from what I am told, if they have already put in an application, it is unlikely that there will be overlapping. It is fair, at any rate, that they should carry some of the cost, and that they should realise that there are some favourable factors which have to be taken into account in the present situation to balance the unfavourable factors. The intention, therefore, is that the increase in costs due to the tax and the recent increase in price which the oil companies have described as an emergency surcharge—that is, the increase in price—should be met with special legislation, special methods and quite separately from the normal control of charges.
  Consequently, any increase in fares under this Clause and, on the other hand,
  46
  the additional costs due to the tax and the recent increase in the price of petrol, should be left out of account. That is the real guide to the Tribunal or the commissioners in considering any wider questions that might arise. That is the legal result of these provisions. If I have not wholly understood them, we can press points further in Committee.
  Mr. Ernest Davies: The Chancellor has referred to the fact that the companies will be able to put up their charges to meet part of the increase in the price of oil, but according to Clause 2 (1), they may do so—
  "… with a view to offsetting the increase in duties under this Act. …"
  There is no authority given to increase prices above offsetting the duties.
  Mr. Macmillan: No, but the figures of one-eighth and one-twelfth are taken roughly to offset the duty. As I said, I did not think it right that we should give them power to recover more than a fraction to offset the higher prices. That is why we chose one-eighth for the small operators and one-twelfth for the large operators as the nearest we could get to a fair assessment of how much should go into the additional tax.
  If we look at it in another way, these are the maximum increases, as I have said. In an Act of Parliament we have to legislate in a way which will deal with the generality of cases. In this Clause, however, we make it clear that the operator may raise his fares by one-twelfth or one-eighth as the case may be. I think that this general provision is fair and reasonable. It does not mean that all operators should put up their fares by these fractions, still less would the Government wish them to do so.
  Just after the Bill was published, I saw a headline in a newspaper saying:
  "Bus Fares to Rise by a Penny in the Shilling."
  As far as I know, that statement was made before any operator had announced any such intention. Bus operators must not, of course, blindly put up their fares by these fractions just because an Act of Parliament says they may. I observed that an hon. Gentleman opposite nodded when I said that there are factors in the present circumstances which will help bus operators. There will be reduced congestion in big cities

  47
  and schedules will probably be rather easier to keep. There will be more passengers and fewer empty buses. If employers and workers can arrange to spread out their hours of travel a little, we may be able to spread the load still more.
  Therefore, I say that the bus operators would be wise—the travelling public will expect them—to size up these various factors, as well as the additional cost of fuel, before raising their fares, and then raise them only to the extent that it is absolutely necessary for them to do so.
  Mr. Arthur Lewis: As the right hon. Gentleman has worked out the effect of the increased tax to fractions, can he say to what extent he has worked out the extra revenue that the companies will get because people who would normally use their cars are being driven off the roads and will use public conveyances?
  Mr. Macmillan: The purpose of my general remarks at the beginning was to say that, at the worst, if the rises were the maximum permitted, I should regard the increase as a very small one and not a large one in respect of both the cost of running industry and the burden upon the ordinary traveller. If some of the companies can make additional profit as a result, which is perhaps theoretically possible, I suppose that they will fall into the trap to which reference has already been made and will have to pay additional Income Tax.
  Mr. Lewis: The Chancellor misunderstood my point. He says that he has worked out in detail what the cost will be to the various companies. He has referred to ¼d. on the fares and to a fraction of one-twelfth. Can he tell us how much extra he estimates the companies will get because of the large number of additional passengers that they will carry?
  Mr. Macmillan: We have done our best to get what seems to be a fair basis. That is why, in the case of small operators in rural areas, where it is very important that the buses should not be taken off the routes, we have set a slightly higher percentage, while the percentage in the case of the larger undertakings is lower.
  48
  In that context, I might call attention to what is being done by the London Transport Executive. It is proposing to raise its fares not by the permitted one-twelfth but by one-twentieth, and it is doing that by putting ½d. on the lowest fare and leaving all the other fares alone. In other words, whereas, under the Measure, it could legally recoup £300,000 a month, it is seeking to recoup only £180,000 a month. No doubt for the reason mentioned, that it may visualise some offsetting advantages, it wishes to recoup no more than one-twentieth instead of the permitted one-twelfth. This shows a sense of great responsibility to the travelling public, and I hope that parallel action will be taken by other organisations whether they are private enterprise or national enterprise.
  Mr. Walter Monslow: Is the right hon. Gentleman aware that the tax on crude oil has had a terrific impact on municipalities for some time? To give an illustration, an undertaking in my constituency had a deficit of £46,000, which led to an increase in fares, and further representations are to be made for another increase as the result of this Bill.
  Mr. Macmillan: The hon. Gentleman says that the undertaking was making a loss under the old rate of taxation. I am trying to give a fair account of what its position will be vis-à-vis the new rate. Organisations will be able to recover, according to their character, either one-twelfth or one-eighth on their fares. What the London Transport Executive has done illustrates my point that the increases should be seen in their proper perspective.
  It is the intention in London, I am told, to raise the 2½d. fare on the buses and the underground to 3d. and leave all the other fares unchanged. That has great advantage for those who travel rather far to their work, while it puts a very small additional burden upon those who travel short distances. "Advantage" is not quite the word. It is a matter of taking care of the interests of those who have to travel long journeys and putting a small additional burden upon those who have short journeys, and that, I think, is right.
  I hope that on both counts—the effect upon industry and the effect upon the passengers—we shall not exaggerate the effect

  49
  upon costs of the increased duty and price.
  Mr. Cyril Bence: On the question of costs, I hope the right hon. Gentleman has taken into consideration, in relation to the rationing of fuel, that in modern industry, with processes in full swing, it is very important to have regular delivery of raw material and regular and quick clearance of the products afterwards. It is imperative to keep costs down in industry in order to get the products away from the factories as quickly and as regularly as possible. All costs will be driven up tremendously if there is not a regular clearance from the factories.
  Mr. Macmillan: The hon. Gentleman raises a very important point, whether, under the principles of rationing, we are making the right distribution to ensure a flow of industrial products. That is a far more important factor than any ½d. or ¼d. in the £ in extra costs. The important thing is to get sufficient use of the oil which is available. We must ensure distribution of it so that our great industrial life goes on unchecked. I am sure that the hon. Gentleman will agree with me that that factor can have a much more real effect on costs than any minor increase in costs, and, therefore, it is much more important.
  Mr. Bence: Yes, Sir; it is much more important.
  Mr. Macmillan: One can lose a great deal more in industry through not having one's product at the place at which one wants it than through having to pay some small increase in the cost of getting the product there. The loss is in not having material where it is wanted at the critical moment. We want a system which is calculated to maintain industry at the highest possible level. However, that is irrelevant to the point that I am trying to make, which is that this cost factor does not affect true costs.
  This Bill, which I have done my best to explain—I am grateful to hon. Members for listening to me and for helping me to make some of the points—is a temporary Measure. It deals with a temporary emergency. I feel that this is the best way of doing what we want to do. I realised when I made this decision that it might not be a very
  50
  popular one, but I am sure it is the right one and I ask the House to give the Bill a Second Reading.
  4.19 p.m.
  Mr. Gordon Walker: Listening to the Chancellor of the Exchequer, who rather played down this tax, one would think that everyone would be better off, that it would bring benefits to all sorts of people, including even those who drive motor cars, because they will save money, and that the burdens, if he chops them up into sufficiently small bits, will be so small that no one will notice them. The fact is, however, that the right hon. Gentleman is making the greatest single increase in petrol duty ever made in its history. This he is imposing upon a product which is already overtaxed, and he is doing it in the context of one of the severest economic crises that the country has had to face.
  The real question which we have to ask, and with which the Chancellor has not dealt, is how far this swingeing tax helps to meet the economic crisis. The Chancellor said that there was some public confusion about the scope and purpose of the tax, but I must say that the confusion has not been removed by the speech which he has just made. He has said certain things, and left other things unsaid, that make it very hard to understand what is the purpose of the tax.
  For instance, the Financial Times, which is not normally a paper on our side in politics, asked a very pertinent question which the Chancellor did not mention either on 4th December when he made his first statement, or this afternoon. I want to draw this to his attention and to ask the Financial Secretary to answer it. The Financial Times said:
  "A tax increase on petrol is wrong in itself, but it is absolutely indefensible except on the assumption that there is still an immediate inflationary threat."
  Is it the view of the Government that there is an immediate inflationary threat? Do the Government feel, for instance, that there is an urgent need to suppress an inflationary danger in the motor car industry? Is there or is there not a great inflationary danger, or has it decreased and declined? We really have to be told the Government estimate of that if we are

  51
  to make a sound judgment on the economic merits or demerits of this tax.
  The Chancellor said nothing about that and the explanations he has chosen to give have shrouded the question in great obscurity and ambiguity. He has given two reasons which are not connected and not even compatible. I do not think that either is right. He said that one of his aims was to raise revenue. For what purpose? Is he raising revenue to make up the shortfall in duty resulting from the drop in the consumption of petrol, or does he want to raise revenue to make good that saving of £100 million which he promised us, in his Budget, would be made in the course of the year?
  Lately, the right hon. Gentleman has become very quiet about that £100 million, but he said at the time of the Budget that it was essential to the structure of his Budget. It is not enough for the Financial Secretary to say, as he said the other day, that the Chancellor will have a surplus at the end of the year, because the Chancellor told us that the surplus would be £100 million more, owing to savings in Government expenditure. Is the purpose of the increase in the tax to raise revenue to make good the loss of revenue, or to make up the £100 million? It cannot be both. The increase will yield about £90 million a year.
  If the Government's prime intention is to use the duty to check purchasing power, then this is about the worst tax for that purpose. There are many fairer, less inflationary and wider spread taxes which the Chancellor could have used; and if we are considering ways of saving dollars there are matters such as the consumption of tobacco and the extra use of Commonwealth tobacco, and so forth.
  The Chancellor gave us a second reason to explain the purpose of the tax. Although I have tried very hard to follow it, I find this part of his argument unintelligible. It is interesting to note that he has wrapped it in metaphor and has never told us what he means. He said on 4th December that oil must be guarded by taxation as well as by rationing. He went on, in a glorious mixed metaphor worthy of his predecessor, to say:
  "… it is wise to buttress this precious liquid …"—[OFFICIAL REPORT, 4th December, 1956; Vol. 561, c. 1061.]
  52
  Does that mean anything at all, or is it just a rhetorical flourish? Will the Financial Secretary try to translate these metaphors into intelligible terms which we can understand? Will he tell us how this duty will help us to recoup our gold and dollar reserves, one of the things which one would think would come within "guarding and buttressing"?
  The Chancellor said that he thought that the country felt that there was common sense in this increased tax. It is, on the contrary, almost impossible to understand how any of this "guarding and buttressing" can be achieved by a petrol tax in the context of petrol rationing. If there were no petrol rationing, I could see an economic case for this, at any rate one which could be argued, but how can it be argued in the context of petrol rationing? Its only possible purpose can be to bring petrol consumption below the level of the ration. If that be the case, let us be honest and reduce the ration and face the thing properly.
  It is a truism of all rationing that the total ration allocation is always taken up. If there are unused coupons, because people cannot afford to use them, or for some other reason, a black market develops. If the Chancellor succeeds in getting consumption below the ration allocation, consumption will be made equal to the ration allocation level through the black market. That will work in favour of rich people against ordinary people who now have all the added difficulties of getting to work by overcrowded public transport, and so forth.
  Money should not be allowed talk in this way when it is a question of sharing burdens. Part of the reason why there is deep and increasing resentment about the petrol tax is that it makes the sharing of the burdens more unequal than before, burdens which have to be shared as a result of the closing of the Suez Canal. I therefore believe that the tax is both irrelevant to our economic needs and unfair.
  Further, it is positively harmful to the economy, especially when it is considered with the price increase. I want to ask the Chancellor one or two questions about the price increase. I want once again to quote the Financial Times, which again asks a very pertinent question which I hope will be answered, because it is very

  53
  important. The Financial Times said, on 5th December:
  "What is perhaps most surprising of all is that the oil companies, after discussion with the Government, are putting a much heavier proportionate increase on fuel oil prices than on petrol. The apparent implication is that the steel industry is to pay over 30 per cent. more on its fuel costs, so that the Chancellor can take the main benefit from an excessively large price increase in petrol."
  Why was a disproportionate share of the increased cost put on fuel oil prices, after discussion with the Government and presumably, therefore, on the advice of the Government? Why was this deliberate extra burden put upon industry?
  Do the Government anticipate prices will rise further? Is it already possible to say on the facts already known whether the price of petrol is likely to rise again in the near future? It is generally expected that world crude oil prices will rise in the next few weeks. Can the Financial Secretary give an estimate of what the total price of petrol per gallon will be in the New Year?
  With these price increases, it is extremely unfortunate that the oil companies should make extravagant and provocative increases in dividends at this particular time. Indeed, on the very day on which these price and tax increases were announced, the Shell Transport and Trading Company put its interim dividend up by 25 per cent. and its shares rose substantially on the Stock Exchange, so that shareholders had capital gains as well as increased dividends.
  Mr. Nabarro: I am sure that the right hon. Gentleman would want to be fair and put the matter in its correct perspective. The Shell Group estimates that it will have to raise about £1,000 million of new capital in the next ten years. How could that capital be attracted unless there were a reasonable yield on the investment?
  Mr. Gordon Walker: I think that there was a very reasonable yield on the investment before this increase in the interim dividend was made. This afternoon the Chancellor was appealing to various concerns to help absorb part of the increased costs, but he made no comment about that sort of thing which, if it goes on, will destroy the united national effort for which he is asking. He cannot merely ignore provocative actions of this sort, which take place in connection with the
  54
  very commodity of which people are having to go short, and in which the companies concerned do not seem to have to bear any part of the burden which has to be borne by others.
  This tax plus price increase will make a direct impact upon the economy. It will raise prices in all sorts of direct and indirect ways. Many of my hon. Friends will be eager to enlarge upon its effects upon particular industries, local authorities and special classes and categories of people, and they will certainly do so with much more expert knowledge than I command. I therefore want to make only one or two general points upon the question of its impact upon the economy. Clause 2 will have to be examined in detail in Committee; it is very difficult to discuss it until we have detailed Amendments in front of us. We shall have to see, for instance, whether the figure of one twelfth in respect of the London Transport Executive is properly arrived at, bearing in mind that it operates railways, which do not use petrol, in addition to buses.
  The Chancellor was not very convincing upon the general argument of inflation. This increased duty is being put on in the context of many other simultaneous price increases. If each item is taken separately the effect can be made to look very small indeed, but the Chancellor is putting on the increase at a time when all sorts of other increases are flowing together. Has he taken into account the danger of setting up a wage-price spiral? There can be further indirect effects of his tax than those which he has mentioned, if it triggers off an extra demand for wage increases. Then the whole inflationary effect begins to enlarge and spread itself.
  An increase such as this, which brings about similar increases in the price of all kinds of food and other commodities, and bears particularly hardly upon the workers, old-age pensioners, and everybody with a fixed income, must create a great pressure for wage increases, which would not otherwise arise to the same extent. That has to be added to the direct and indirect inflationary effects which the Chancellor was telling us about.
  He did not mention it, but one of the consequences of the tax must be an increase in export prices. All our exports

  55
  have to be carried to the ports, and the cost of every one will be affected by increased transport charges. This increase in export prices is coming at a time when there are already signs that our exports are falling off to some extent. Last September there were signs that the decline was rather worse than the expected seasonal decline. It was not a great amount, but there was some indication of that, and that was before any of the effects of the Suez crisis began to make themselves felt.
  The Chancellor has made great play with the idea that the tax is a temporary one. He committed himself to an expectation that it would not last for more than four or five months.
  Mr. Macmillan Mr. Macmillan indicated dissent.
  Mr. Gordon Walker: He used those words in some context or other in his speech. Perhaps his right hon. Friend can tell us what he meant when he said that. Even if it were a temporary tax we believe it to be a bad and wrong tax, which imposes all sorts of improper and unfair burdens. People will look upon the talk of its being a temporary tax with a rather jaundiced eye. As he said, some of our most permanent and what I may perhaps call "noble" taxes have a lineal descent from temporary expedients. Chief among them is Income Tax, in connection with which Gladstone once fought and lost a very famous Election, when he sought to abolish the tax. Entertainments Duty, Purchase Tax and many similar taxes began as temporary expedients.
  The Economist is already criticising the Chancellor, although only in this one respect; he has been getting a good Press in its columns otherwise. But it criticises him for talking about this as being a temporary tax. The good Press which he has had in that publication must have been a little oasis in a desert of criticism by the rest of the economic and financial Press. All sorts of pressures will be brought to bear upon him to make it less temporary. The Chancellor has clearly said, "I mean what I say when I call it temporary." There is one way to prove that he means what he says. Will he give a clear and categorical pledge that the tax will be removed when rationing ends? When the Bill is in Committee, we shall give him the opportunity to write this
  56
  clear pledge into the Bill. If he will not, doubts will spread as to whether or not it will be really temporary in the end.
  The tax has been presented—not so much today, but when he first told us about it, on 4th December—as an integral part of the measures necessary to save the £. There will be general support—certainly from hon. Members on this side of the House—for all appropriate and relevant measures designed to achieve that end. Our great need is to find means of channelling our economic national resources into the essential economic activities, and cut down upon our inessential or less necessary activities. Anything short of that is not really likely to help to save the £.
  We know that the Chancellor is in difficulties, because he is threatened by potential anti-planning rebels, who are more blind and hidebound even than the Suez rebels.
  Mr. Lewis: They are the same people.
  Mr. Gordon Walker: The Chancellor is in difficulties because there would be uproar from many of his own supporters if he took the necessary planning measures to channel our resources into the most essential economic activities. But if he wants to make an appeal to which the nation will respond he must pluck up his courage and defy these potential rebels.
  Mr. Nabarro: Who are these people?
  Mr. Gordon Walker: They are leery well known. I should have thought that the hon. Member for Kidderminster (Mr. Nabarro) would know at least one of them.
  The Chancellor should drop his petrol tax and take proper measures to gear the economy to the needs of the nation. When we strip away all the right hon. Gentleman's metaphors and oratory, what has he done to give the country a lead in facing this very grave economic crisis? He has done only two things. He has made the rather unwise decision to beg the United States to grant a waiver of interest, and he has introduced this petrol tax, which is irrelevant, unfair and harmful to the economy. We do not regard these measures as being good enough. They do not measure up to the needs of the times. We shall, therefore,

  57
  oppose the Second Reading of the Bill, and do our best to amend it and render it less harmful in Committee.
  4.40 p.m.
  Sir James Hutchison: At the expense of only five minutes of the precious time of this House I should like to refer to the position of a very old and important industry in Scotland, the Scottish shale oil industry. It has often been referred to by hon. Members on both sides of the House, but when the context was slightly different from that of today; different in the sense that the oil problem had not been pressed on us with the urgency with which we now view it, and also that it was not proposed to increase the tax.
  This industry, one of the earliest oil producers in the whole world, could supply—were it not in a state of diminution and decay—about 75 per cent. to 80 per cent, of the oil requirements of the road transport in Scotland. But it is, as a matter of policy, gradually falling into decay. Some of the pits have already been closed, causing unemployment in the area, and I am afraid that process will go on unless something can be done.
  I understand that the British Petroleum Company, the owners—the holding company which controls these Scottish shale pits—are prepared to spend a very considerable sum of money—perhaps about £1 million—in order to modernise the plant and so allow the industry to continue. But they will do so only if the differential in taxation which it has enjoyed is increased. At present, up to the time of the new tax, while imported oil was paying 2s. 6d., Scottish oils were paying only 1s. 3d. I want this new shilling increase not to apply, at any rate to the derv products of the Scottish oil industry.
  Mr. Nabarro: I am sure that my hon. Friend does not wish to restrict what he is saying only to the products of the Scottish shale oil industry. What about the English industry, which is in exactly the same position?
  Sir J. Hutchison: I agree. I would say that the extra tax should not apply to the derv products of the indigenous oil producers. That would be a great benefit to the Scottish oil industry.
  It seems to me illogical that the Government should spend large sums on
  58
  subsidising agriculture, or that the produce from the surface of the land should be encouraged, and that at the same time they should tax the wealth which lies under that surface. There can be no logic in the expenditure of these vast sums of money on the one hand and taxing out of existence the indigenous oil industry of Britain on the other. So hope that my right hon. Friend the Financial Secretary will be able to give some encouragement to hon. Members on both sides of the House in the matter of excepting from the tax increase the derv products of the indigenous oil producers of this country.
  4.43 p.m.
  Mr. John Taylor: As the representative of a constituency which includes part of the Scottish shale-fields, I am glad of the unexpected support of the hon. Member for Scotstoun (Sir J. Hutchison). I should have welcomed that support last June on the Finance Bill, when, with my hon. Friend the Member for Midlothian (Mr. Pryde) I was responsible for an Amendment to exempt the shale oil industry products from taxation. I am sorry that the hon. Gentleman and his hon. Friends went into the Lobby against that Amendment. However, I am all the more pleased that he has now seen the error of his ways and is supporting this very deserving industry.
  Sir J. Hutchison: The hon. Gentleman will admit that the circumstances are a little changed.
  Mr. William Ross: We shall hope to see the hon. Gentleman during the Committee stage.
  Mr. Taylor: Because the circumstances have changed, there is an even stronger case for the plea I wish to make today.
  The oil refineries in Midlothian and West Lothian produce oil from shale at the rate of over 19 million gallons per year. Three-quarters of this amount is high grade diesel oil and roughly a quarter is motor spirit. As the hon. Gentleman said, this is enough to keep running three-quarters of the public transport in Scotland; or it could supply the London buses for about six months of the year. Therefore, it is not an inconsiderable proportion of our oil

  59
  supply and it certainly is a very important proportion at present.
  Last Thursday, when the Chancellor made his statement, he said that there would be corresponding adjustments in the rate of duty for all indigenous oils. That seemed to me to be a rather ambiguous statement, and later I asked him to clarify it. I asked him whether home-produced oils which are now subject to a 1s. 3d. duty per gallon, or 50 per cent. of the 2s. 6d. tax, would be subject to the same 50 per cent. rate of the increase; in other words, would they pay 6d. a gallon additional tax instead of 1s? The Chancellor said that the same preferential margin would be maintained.
  I thought then, and I consider that I was entitled so to think, that this meant that the ratio of duty for native oils would be 50 per cent of the duty on imported oils, namely, 1s. 9d. per gallon, or an increase of 6d. per gallon instead of 1s. I immediately inquired of Scottish Oils what was the position. I was informed, and the Chancellor confirmed it this afternoon, that the instructions to Scottish Oils was that the 1s. increase applied to its products just as it applied to any other oils. I was able to consult the general manager of Scottish Oils within a few hours of the Chancellor's statement, because the general manager was in London at the time.
  It is interesting to note that the general manager was in London in order to consult his board and get permission to join in a joint plea to the Chancellor of the Exchequer. The plea was to be made by people representing management and workers in the industry, and was for a remission in taxation. The workers in the shale oil industry had tabled a request for a wage increase. They do not do that very often. Their wages have always lagged a long way behind those of other miners and other oil workers, and are very much lower than those of other comparable workers. It is a long time since they put in a wage claim, and now they cannot wait any longer.
  The management, to do justice to it, has always been as willing and as forth-coming as the economics of the industry permitted. It wanted to make the increase, but was faced with the fact that the industry was losing money at the
  60
  rate of £200,000 a year, and just could not do it. The workers' trade union asked whether the management would join in a general appeal to the Chancellor to reduce the tax on shale oil, because that was the only way to ensure the survival of the industry.
  It is a strange position. The shale oil workers are a fine body of people. They have a record second to none. There has been no strike in this industry for two generations. The workers have been loyal to the industry, and are very proud of it. They have shown monumental patience, which I hope will not be rewarded by another setback. A measure of tax remission is the only hope of a future for the industry.
  The workers are not producing dolls' eyes or candy-floss or anything frivolous of that nature. They are producing oil, the most valuable mineral, along with coal and uranium, that there is in the world today, and in this country at this time it is exceedingly and exceptionally valuable.
  I made out this case on the Finance Bill. Today, as the hon. Member for Scotstoun said, it has additional and exceptional weight. The most miserable ten minutes I ever spent in this House was last June when I sat here listening to the then Economic Secretary telling us that he was discarding our plea on behalf of the shale oil industry. Indeed, he discarded it with almost contemptuous cynicism saying, in effect, that the industry was expendable.
  The Economic Secretary saw only a comparatively small threat to the Treasury as a result of the concession, but my hon. Friend the Member for Midlothian and I saw the hoplessness of the position of the workers in the industry. We saw the plight of the men and women in the shale fields who were condemned by the hon. Gentleman's airy words at that time to the prospect of a hopeless future for their industry. It was bad policy then, but it is criminal policy today. It would be worse than prodigal folly to allow this source of oil to dry up.
  In response to an interjection by my right hon. Friend the Member for East Stirlingshire (Mr. Woodburn) the Chancellor indicated that he would look carefully at the difficulty to which my right hon. Friend drew attention. On this issue

  61
  the Treasury should think in terms of national need and not in terms of fiscal expediency. To exempt Scottish oils from this tax would mean an increased income for the Scottish oil industry at the rate of £610,000 a year. It would mean the salvation of the industry and would enable it not only to meet the wage claims, but also the costs of modernisation and perhaps of development which would increase the flow of oil.
  The 50 per cent. reduction is not a subsidy; it is an inadequate recognition that the shale oil industry is in a special position, that the industry produces oil without pipelines, without tankers and without abortive expeditionary forces and stalemated invasions. I am pleading today for an industry which has 15,000 people engaged in it or dependent on it. It is not merely the 6d. or 1s. reduction in tax with which we are concerned; it is the fact that this reduction, if granted, would mean that the industry could survive. If the reduction is not granted it will mean that the industry may very soon disappear altogether.
  There is a chance for us to develop these oil supplies of my native land, and that is what I am pleading for. The United States is now spending very large sums of money in a new exploitation of shale oil. Other countries are doing the same. Only in Britain are shale oil resources threatened. I am told that the industry is good for another twenty-five years at its present rate of extraction if given the opportunity to survive. If the Treasury adopts a realistic policy we shall have the product of that industry for another twenty-five years. As I have said, it is not only the 6d. or 1s. for which I am asking today, although that is symptomatic, but for the product of the industry for the next twenty-five years which is computed at 25 million tons of oil—500 million gallons of oil—as a minimum. That is what is at stake.
  I make my plea in all sincerity. I hope that the Chancellor will concede the point, because it is impossible for any reasonable Minister, in view of the present oil shortage, to refuse such a plea. To do so would be absolutely indefensible and it would make the nation think poorly of any Chancellor who refused such a plea. Therefore, in the name not only of the decent people of my constituency and of
  62
  that of my hon. Friend the Member for Midlothian, but ill the name of sanity. I ask the Chancellor not to apply the increased tax to the shale oil industry of this country.
  4.56 p.m.
  Sir Robert Cary: I am sure that the hon. Member for West Lothian (Mr. J. Taylor) will not expect me to follow him too far into the subject of the future of the shale oil industry of Scotland. He said that the workers in that industry were a very fine body of people, but of course that is nothing exceptional in Scotland.
  I wish to take up a paint made by the right hon. Member for Smethwick (Mr. Gordon Walker) to the effect that it is easy for the Chancellor of the Exchequer to select a point of taxation, separated completely from its other incidences in the life of a country, and to prove conclusively that the extra duty would represent in bus fares an increase of only one-fifth of one unit in the retail price index. I think that rather falsifies the whole of the situation.
  I have intervened in the debate because, as a number of hon. Members who represent constituencies in South Lancashire well know, I have for many years been a director of Lancashire United Transport which operates in the large central area of Lancashire between Bolton, Liverpool, Manchester, Warrington and Leigh. The fleet operated by that company is of average size in terms of provincial operators. It consists of 500 double-deck and single-deck buses. Many of the services operated by the company link up with services provided by other operators in the provinces which operate as far as Newcastle-upon-Tyne.
  The future of Lancashire United Transport is centred upon the real need, if this tax is to be imposed, to obtain the increase permitted on all fares—I do not say the maximum increase—under Clause 2 of the Bill, at least during the temporary period of the increased tax. The Chancellor made the point in his speech that the London Transport Executive was only proposing to increase its 2½d. fare by ½d. leaving all its other fares untouched. But, of course, the cheapest short-distance fare of the London Transport Executive in the centre of London is so profitable that the Executive can well afford to carry the many services which operate beyond the

  63
  centre of London, and indeed most of the poor relations that operate to the outer fringes of London. In the case of many provincial bus services that rather golden position at the centre does not apply.
  If we look at the matter in terms of the area that I am privileged to represent we see that there is no golden centre like that in London where just to increase the lowest fare of 2½d. by ½d would provide sufficient remuneration to cover the whole services. Therefore, whilst the Chancellor has quite rightly said that the London Transport Executive is acting generously by the public in only increasing one of its fares, it will, I fear, be necessary for many of the large provincial bus fleets to impose increases over the general range of fares.
  The suggestions that have come before my own company are that a ½d. be applied to all fares from 2d. to 11d. and 1d. applied to all fares above 11d. That would give us sufficient additional revenue with which to meet the temporary taxation; but, of course, it must not be overlooked that this tax is imposed upon what for many of these operators, is a most difficult background.
  For instance, we have had to find some £30,000 a year additional revenue to meet a wage claim which has just been granted of 5s. a week in the provincial bus operating services, which includes Lancashire United Transport. That £30,000 can be absorbed within the economy of my own company; it was not sufficient to justify our going to the Commissioners and asking for a further fares increase to pay that wage demand. If in addition to that increased wage demand of £30,000 we then impose upon the economy of the company about £70,000 to £80,000 by the imposition of this tax, then we confront a company such as my own with the need to find £100,000 in cash. The advantage given to us in Clause 2 of the Bill enables that to be done; but if the Chancellor of the Exchequer finds that we apply that provision to the fares over the whole of our range by ½d., do not let him think that we shall be ungenerous to the general public because we do not follow the exact example of London Transport.
  May I say one other thing to the Chancellor? He laid great stress today on the
  64
  fact that this tax is to be temporary. I would ask, why not make it temporary in the terms of House of Commons authorisation and why not subject it to six months' Parliamentary revision. Let this tax then be brought back here to be confirmed. I think that that is important because, as was made clear by the hon. Member for Salford, West (Mr. Royle), when he interrupted the Chancellor during his speech, this tax will become, if we are not careful, a burden on the community, and it is important not to confuse this purely temporary measure with the perfectly legitimate applications which are now before the Traffic Commissioners to revise fares in order to meet wage claims.
  Mr. William Shepherd: If the Chancellor is generous enough to say that he will remove this tax after six months' duration, will the bus company directors also give an undertaking that they will remove the increase in the fares that they put on?
  Sir R. Cary: Most certainly. I can give my hon. Friend that assurance; but it is important to bear in mind the background against which this temporary tax is being imposed. Many bus services throughout the country have already fare structure claims before the Traffic Commissioners, and if certain wages demands are to be acknowledged in the future those claims must be made permanent by reform in the structure of fares throughout the country.
  Mr. Harold Wilson: The hon. Member is making a very important point about providing legislative sanction to the suggestion that this tax should be for only a limited period. Since we on this side of the House, if by any mischance this Bill gets a Second Reading tonight, are thinking of putting down an Amendment in those terms, can we have an assurance from the hon. Gentleman that he will go into the Division Lobby with us in support of that Amendment?
  Sir R. Cary: May I say to the right hon. Gentleman that I will give it my consideration. But I would, in passing, say that I am completely free in giving him that limited assurance because I have never been aware that in the ranks of my own party I am at any time subjected to undue or unfair pressure as to the way in which I should act on any particular

  65
  occasion. [An HON. MEMBER: "What about Suez?"] Nevertheless, it is psychologically important, if the Chancellor wishes to make a case to the public that this Measure is purely temporary, not to look at it in terms of an additional tax at all.
  I look upon this tax as a form of surcharge to meet an emergency, and I should like to see it dealt with in a less permanent form by subjecting it to Parliamentary review at an extremely short interval. Let us hope that the Chancellor's optimism is justified and that within six months this tax will be unnecessary.
  Hon. Members: Four or five months.
  Mr. Nabarro: The Chancellor did not say that.
  Sir R. Cary: He implied that perhaps in six months' time we might come to a point where the oil position is so much better that the continuance of a tax such as this would become completely null and void.
  May I briefly refer to one other matter about which we heard a lot at Question Time and about which we shall perhaps hear a certain amount in the debate which follows. It has some relationship to this Bill. I have myself had representations from the Manchester and Salford Taxi-Cab Drivers' Association, which feels most strongly that an unintentional act of unfairness has been committed by the Ministry of Fuel and Power—[An HON. MEMBER: "Unintentional?"] I think that at this early stage we should give the Minister concerned the benefit of the doubt—by giving the London taxi driver a far bigger allocation than his provincial brother in Manchester, Liverpool, Glasgow, Leeds and elsewhere—all the taxi-cab services beyond the frontiers of London.
  I do not know why there should be the assumption, which the Minister of Fuel and Power implied in answer to Questions today, that the London taxi-cab driver had greater work and greater business. I feel that the taxi-cab drivers of Manchester, or Birmingham or Glasgow have just as much business to discharge and that there are as many fares waiting for cabs at stations and in the streets.
  Mr. Deputy-Speaker (Sir Charles MacAndrew): I think that the hon. Gentleman is going rather beyond the Bill.
  Sir R. Cary: I beg your pardon, Mr. Deputy-Speaker, but I cannot, in view of the fact that a deputation waited upon me in the Lobby the other day, avoid trying at this stage to make a plea for provincial taxi-cab drivers.
  May I say in parenthesis that I see that a correspondent in the Sunday Times yesterday described taxi drivers as
  "That philosophical, mufflered, seen-from-the-back band of men, the London taxi-drivers …"—
  Mr. Deputy-Speaker: Putting it in parenthesis does not put it in order.
  Sir R. Cary: I could not but try to put it in brackets. Nevertheless, perhaps that aspect could be elaborated on some other occasion.
  There is one final point which I should like to make. I know that there are many other hon. Members who want to speak and that there is not much time, as we hope to get the Second Reading of this Bill by 7 o'clock. This Bill does imply many things to the whole of the country, when we think that our economic need, once so strong and so permanently based purely upon coal, is now based upon coal and oil—we have to import both and we cannot get enough of either—and the economy of our country has become the prisoner equally of the coal factor of the Eastern American seaboard and of the sheiks of the Persian Gulf.
  That is raising an immense challenge to us. It is the fundamental issue—and this modest and moderate Bill implies it—and fundamental challenge of our time, when the leadership of our country must be devoted to making this country richer. If we do not succeed in meeting this coal-oil challenge, which is fundamental to our country, it will be idle for a great newspaper like the Daily Mail to publish an article tomorrow asking whether this country has become a second-rate country. Leadership must be devoted slavishly to making this country richer by sustaining those elements within our economy, even though they may mean sacrifice, which do make us richer, and taking national resources and money away from those things which are not quite so important.
  This matter is so fundamental to both sides of the House of Commons that it would almost require the work of a Council of State to discharge it

  67
  adequately. Certainly we cannot do it in terms of the separation which we have seen between the parties in this House in recent debates. This is a matter on a high level, and of great national purpose. Side by side with this challenge is the poisonous challenge of creeping inflation. Some hon. Members may recall that moment in 1940 when Members of the House of Commons wondered how we were to pay for the war. We invited the late Lord Keynes to address us in Committee Room 10. He surprised us a little by saying, "Do not be frightened of inflation. We can have a controlled inflation." It seemed rather like saying that we could have a controlled runaway horse.
  Look at the inflation which even this small Bill represents to our economy. Let us not underestimate the dangers. Lord Keynes said one other thing in that Committee Room which rather shocked all hon. Members, drawn from both sides of the House. He said, "Do not be frightened of inflation. It is the finest debt payer in the world." An economy which attempts to pay its debts by the poisonous method of inflation will most assuredly fail. What we have to do is to assist our economy so that inflation can be taken out of it and we may thereby reach new levels of prosperity by which our people will be assisted and sustained.
  5.14 p.m.
  Mr. Roderic Bowen: I agree with what the hon. Member for Withington (Sir R. Cary) has just been saying. While it is true that a united effort is needed if we are to increase substantially our economic wealth, that is not likely to be achieved by increases in taxation, particularly of this commodity, which is already heavily overtaxed.
  I was not impressed by the Chancellor's financial and economic arguments in favour of the Bill. Whatever financial and economic advantages may be gained by the Bill, I should have thought that they were more than counterbalanced by obvious economic disadvantages. I do not want to go into that point in detail, however, particularly as several hon. Members have already referred to them.
  This increase will mean wage claims. It will increase the cost of exports and mop up purchasing power, and it will
  68
  affect a large number of people who have not much purchasing power to be mopped up. The only possible justification for the Bill is that there is a serious shortage of oil and that the increased duty is needed to reinforce our rationing system. I hope that at a later stage of the debate we may be given details of the actual oil position and the argument for reinforcing the rationing system with rationing by price. If it is felt that the rationing system needs reinforcing—I concede straight away that the Bill will do quite a substantial amount of reinforcing of the rationing by coupons—that is the only valid argument in favour of the Measure.
  Reference has been made to the difficulties of provincial bus operators as compared with London. The position of bus operators in rural areas is even more difficult. All the aggravation which was complained of, quite properly, in relation to the provincial bus operator is present in a keener form in scattered rural areas. The Chancellor gave us the overall effect of this Measure upon such things as bus fares and distribution costs, but he did not tell us that the incidence of this increased duty will be uneven on different sections of the community. The increase will fall particularly hardly upon rural areas, and will bring about unavoidably something like an increase of one-eighth as distinct from one-twelfth.
  It will affect people who have to travel long distances. I am not talking now about those who pay fares of 2½d. or 3d., but of those who already pay very heavy fares indeed. The proposed increases will make an appreciable demand upon their pockets. It will aggravate the very serious position of many rural bus services. For example, within the last few weeks in my area bus services which have been operating for twenty-five years have been abandoned. I am not saying that this is a prime effect of the Bill, but the Bill will be an added argument for abandoning rural bus services and will aggravate the present position.
  The increase will fall heavily upon the small farmer who lives in an area where there has been no electrification, and who operates a small petrol engine and uses petrol in one form or another because he has no electric power at his

  69
  command. It will hit the small farmer because he, more than the big farmer, has to depend on the tractor, which uses fuel that does not come within the provisions of the Bill.
  When trying to calculate the hardship which will be imposed by this Measure, I urge the Chancellor to bear in mind that it will fall unevenly and particularly harshly upon persons who, perhaps, are less able to meet it than the community as a whole. For that reason and others I join hon. Members in asking the Chancellor to be more specific about its temporary aspect than he has been. The proviso in Clause 1 is an indication that it is intended to be of a temporary nature, but there is nothing specific or concrete limiting its operation.
  Whether looked at from a financial aspect or from the point of view of strengthening the rationing system, it would appear that the Chancellor should be able to give an indication that the duty will be reduced to 2s. 6d., at least at the time when the rationing system is done away with. In fact, all the argument is in favour of it being done away with earlier; there is certainly no argument for abolishing the rationing system and continuing with the duty. If there is an argument for not doing both at the same time, I believe that it is in favour of reducing the duty first.
  Mr. Nabarro: Does that mean that if at some future date the ration of petrol were increased the duty should be commensurately decreased?
  Mr. Bowen: I would say, yes. The need for the duty would certainly be less. I hope that we are not moving into a period in which there will be any necessity to juggle one way or the other. I should like a straightforward undertaking from the Chancellor that as soon as the ration is ended this duty will be reduced at the same time. I should like to see a specific requirement put in the Bill that it will end in six months' time. Whatever limitations on his actions the hon. Member for Withington (Sir R. Cary) may feel to exist, I can give an assurance that if an Amendment were moved in Committee to that effect it would certainly receive my support.
  I do not see what the Chancellor of the Exchequer would be giving away if he did as I suggest. It would show quite
  70
  clearly that when he talks of this being a temporary Measure, he means it. If, for any reason, the period should be sligthly longer than he at present hopes, there is no reason why he should not have to come back to the House to obtain further sanction for an extended period for a duty which I believe every one of us—whatever our political complexions—must regard at the best as a most unfortunate necessity.
  5.24 p.m.
  Captain M. Hewitson: I should like to bring the House back to a consideration of the effects of this extra tax on industry and wages, apart from its effects on transport.
  The hon. Member for Withington (Sir R. Cary) said that he would like to see leadership slavishly devoted to making this country richer. I suggest that he is sitting on the wrong side of the House. If that statement were made by an opponent in his constituency and his opponent put forward the ideas of controls, fair shares for all, and making people pay who can really afford to pay, the hon. Member would be the very first to oppose him. I suggest that before making such statements, in what was an amazing peroration to a speech which up to that point had been reasonable, he should think the matter over.
  I wish to bring to the notice of the Chancellor the effect of this tax on light hydrocarbon oils used in industry, especially in the paint industry and in the manufacture of linoleum. My constituency is in Hull, which is the largest paint manufacturing area in the country outside London. In Hull we are afraid of the effects this tax will have on industry. The Chancellor said that he hoped industry would be able to absorb costs for the time being. That may be possible in transport, it may be possible in ordinary petrol rationing, but it will be utterly impossible in industry itself.
  The paint industry is not having an easy time. Its margins are very small and contracts overseas and in this country sometimes rely upon 1d. per article on a contract price. The extra 1s. per gallon will mean to the manufacturer in the paint industry that prices will have to be increased. If industry generally consuming paint takes the advice of the Chancellor and absorbs the cost for the

  71
  time being, the easy way—especially on the sort of understanding that has been given that this is for only two, three, four, five, or six months—to cushion it will be for people to cancel contracts. That would mean further unemployment in the paint industry.
  Unemployment in the City of Hull is four times the national average. That has been so since the end of the war. We are rebuilding where we can, but if we have to face further redundancy through the application of this tax, conditions will be very difficult for those who can least afford to bear the cost. If the paint industry has to increase its costs, that will mean increased costs at the production lines for every industry. I am not speaking now of foodstuffs, so I hope no one will ask if we are going to eat paint, but it will mean increased costs for everything else we consume—containers, machinery, and commodities for export, all of which require paint.
  With our export costs already cut to a minimum, any increase means greater difficulty in our export markets. It is sometimes said that our greatest competitor in Europe is Western Germany. That, undoubtedly, is so, but the fact remains that those industries in Western Germany that use the light hydrocarbon oils are exempt from any tax on them whatsoever. In this country, the Chancellor is asking the industries which use those oils to pay on them a duty of 3s. 6d. a gallon.
  Mr. Shepherd: But there is a drawback in operation, which surely must be considered when dealing with the question of export capacity.
  Captain Hewitson: I am glad that the hon. Member has mentioned the drawback. The drawback can be obtained only on the bulk export of paint. It can be obtained if the manufacturer who uses paint will estimate the amount of white spirit tax content in the paint on the commodity which he is making. As has, I think, been quoted in this House before, one firm made such a claim a few years ago, and it is estimated that it cost £31,000 to get a drawback of £27,000. Therefore, the argument about drawback is nonsensical. But I fear that I am drifting from my main argument, and will leave drawback for another occasion.
  The increased charges will create difficulty for other exporting industries. The
  72
  fact that workers will have to pay more in travelling expenses, and that prices of other commodities will rise as a result of the duty, will mean that industry, once again, will be inundated with wage claims from the lower paid workers. As a result, the plan to make this merely a temporary charge just will not work, for, if wages are increased over that period because of the extra charges resulting from this additional duty, the duty may be lifted, but wages will not go down again. No industry dare suggest a penny a week reduction in wages. To do so would be to throw the country into an industrial dispute such as we have never before seen in modern times.
  Therefore, between now and the Committee stage, the Chancellor should look again at the problem—and I think that it could be separated—of the application of this duty to light hydrocarbon oils; that is, the white spirit used in various sections of industry.
  The linoleum industry has built up a steady export business in recent years, but it has had a hard struggle to make ends meet. In Scotland and England it has been attempting to give a fair show to the workpeople, and the workpeople have pulled hard with the employers to build up an export market against severe competition from other countries. Even a slight increase in the cost of this product can diminish that export market. We do not want to see that. We want to build our export markets so that we can, at least, assure work for all in the factories.
  To exclude light hydrocarbon oils as I suggest could be done quite simply by an Amendment in Committee. When the duty on white spirit was first imposed, it was stated to be merely a temporary imposition which would be rectified at some other period. It has never been rectified. I imagine that every Chancellor since the end of the war has received a delegation in this subject. Amendments have been proposed to every Finance Bill since the end of the war, and pleas have been made, from both sides, for exemption for white spirit. This is a matter on which sensible action is called for. The Chancellor could either introduce an Amendment in Committee, or make a statement tonight, based upon the power he has said he has of being able to abolish the duty by Order. Let him state that after the Bill goes through he will, by an Order,

  73
  abolish this duty, even if he is not in favour of amending the Bill in Committee.
  Let me again point out our fears in Hull. We have not yet rebuilt the industries which were devastated during the war. We are doing our best, but our unemployment level, as I have said before, is four times as great as that of the national average, and we cannot stand any more. We are asking for help for our paint industry in Hull. By giving that help, the Chancellor will be helping the whole of the paint industry. By reducing or abolishing the white spirit duty, he would be helping not only the paint industry, but all those industries which consume white spirit. That would ease the position and really help our export effort.
  5.38 p.m.
  Mr. William Shepherd: I am sure that my hon. Friends will be sorry to hear that the average of unemployment in Hull is four times as great as the national average. I confess that I was unaware of this, and I hope that we shall be able to do something to help those people. I know them to be very good people, and it is most regrettable that they should have this relatively high degree of unemployment in Hull.
  I interrupted the hon. and gallant Member for Hull, West (Captain Hewitson) to draw attention to the drawback, which is a relevant factor when one is talking about paint. Nevertheless, I feel that those industries which are using a material which is a vehicle for taxation are in a very difficult position indeed. They are in a particularly difficult position if the final product does not indicate that they are using that vehicle. For instance, everyone knows that if the duty on tobacco goes up so does the price of cigarettes, but in the case of polishes, paints and linoleum, the relevance of the increased price to the increased duty is not very clear. If my right hon. Friend could consider any separation in that respect, I, for one, would be very pleased.
  When this duty was first mentioned in the House I questioned the Chancellor about its temporary nature. I still do, although, paradoxically, I think that its only justification would be if it were long-term. It may well be that, in the present state of our economic affairs, we shall not
  74
  be able to afford, in the long term, the consumption of fuel at the rate at which we have been maintaining it for other than necessary purposes. But, if that is to be the situation, it cannot be dealt with in this Bill. We cannot talk about the Bill as a source of restraining demand. As hon. Gentlemen opposite have very properly said, a rationing system does, on the whole, result in the full use of the product up to the coupon issue.
  The way in which it can have a liimted and marginal effect is this: an increase in prices may persuade some people not to license their cars for a given period in which they might otherwise have done so. That is the sole and limited extent to which one can reduce consumption by a coupon issue, by attempting to bolster it by increasing the rate of duty. I repeat that I believe there may be a case as a matter of long-term policy, but not a case for running these two things together now.
  I am very loath to vote for this increase, because I do not consider it wise in any circumstances. I realise the need to bolster the £, though I cannot deal with the broader issues in this debate. It may well be that we are attempting, for example, to bolster transferable sterling to an extent which is not compatible with our economic well-being; but, as I say, I cannot deal with that argument now. I am satisfied that this increase in duty is not likely to improve our economy at this juncture.
  First, I do not believe that there is any real necessity for it, expressed in terms of revenue. Secondly, I do not believe that the danger facing the country as a consequence of the Egyptian intervention is a danger of inflation. By and large, the tendency during the next three or four months, will, I believe, be deflationary in character. I do not therefore believe that my right hon. Friend is facing an emergency in terms of revenue or of inflationary pressure. Those two things would have justified a Measure such as this, but they are not, in my view, present dangers confronting us now.
  There are dangers in increasing the duty. All the pressures to which the economy is subjected are partly psychological and partly economic. There are times when psychological pressures are very much more important than the economic ones, and at this time the psychological pressures are considerable.

  75
  I believe that to try to raise the duty on fuel, with all the effects the move will have throughout the entire range of industry today, is most unwise.
  As the hon. and gallant Member for Hull, West said, if one puts wages up, one cannot put them down again. All our energies ought to be bent to stopping any increase in costs; all the psychological pressure we can exert ought to be devoted towards preventing any increase in costs which might, in three, six or nine months, react against our exports. I do not consider that what the Government are now doing is designed to bring about the minimising of cost increases which I regard as essential.
  I hope that my right hon. Friend will bear in mind what some of us on this side of the House are thinking. Many people will be forced, of necessity, to put up their prices as a result of this tax. Both the small and the big bus companies will be compelled to do so. People take notice of increases in fares; they take a small increase in fares and assume from that that there is a rather larger increase in the cost of living than is justified by that increase, and from that one gets a growing spiral of increases in costs resulting in wage demands.
  I believe that this action is not economically justified, because it will result in a demand for increased wages and it is not strictly necessary in terms either of revenue or a need to combat increased inflationary pressure. Further, I believe that we may well be trying to do too much in support of the £. We ought not to subject our people to so much pressure in order, shall I say, to maintain the present rate of transferable sterling. We must look much more deeply into the ways by which we may avoid pressures upon our people at present which they cannot readily bear.
  I am sorry to have to condemn in such forthright terms the proposal of the Chancellor. I believe that the psychological influences are supremely important just now, and that all our endeavours ought to be directed towards keeping down costs. The effect of this proposal will, in my view, be to stimulate costs and I therefore regret that my right hon. Friend has found it necessary to introduce it.
  5.46 p.m.
  Mr. Frank McLeavy: What the hon. Gentleman the Member for Cheadle (Mr. Shepherd) has just said will, I think, meet with general agreement throughout the House. I regard the decisions of the Chancellor to introduce this additional tax upon petrol and fuel oil as a profound mistake.
  This is not an occasion when the Chancellor finds himself in a budgetary difficulty. The Chancellor is determined to maintain the estimated tax yield of £340 million from this particular section of tax revenue. If we take his figures, he estimates that without the 1s. increase he will lose, for the remaining months of the present financial year, some £30 million. Quite frankly, I consider that it would be far better for the Chancellor to lose the £30 million in estimated taxation for the next four months than cause difficulty to industry by imposing this additional temporary tax.
  If the Chancellor insists upon keeping the balance of his Budget and recouping the £30 million, then, in fairness to the users of petrol and oil, he ought to have considered whether the scope of the tax might be broadened. As the Financial Secretary to the Treasury knows, it is only the road transport industry which, by and large, pays any tax at all upon oil or petrol. Certainly, there is a very large section of industry which pays no tax upon the oil it uses. If the Chancellor felt, in the last resort, that he had to recoup this £30 million, it would have been far more reasonable, in my view, if he had said that he would spread it over the larger group comprising all those consuming the product. I am sure that had he decided to extend the taxation, even in a limited degree, to those industries which already enjoy exemption, he would have been doing something far more profitable than the proposals which are now before us.
  It seems to me that the Chancellor is not concerned about the equity of this tax. All that he is concerned with is raising the necessary £30 million during the next four months. The hon. Member for Cheadle referred to this and seemed to imply that the Suez problem was the cause of our economic difficulties. What we have to do is to get our facts clear upon the whole economic position. The economic crisis was on our doorstep

  77
  before the problem of Suez arose. The grave problem now confronting the nation, therefore, stems not from Suez, but from our whole economic position.
  I want to deal specifically with the two sections of the transport industry which are affected by the proposed increase in tax. In the road haulage section, we find that the Transport Commission is to increase its charges by 7½ per cent. and the private sector proposes an increase of 10 per cent. I am quite sure that these two increases in the costs of road haulage will represent an increase in the cost of transportation of goods which will be detrimental to our ability to maintain the existing price levels of our commodities in the export and home markets. When we bear in mind the effects of these 7½ and 10 per cent. increases in the cost in transport and consider that all kind of amounts will be added in consequence throughout industry, it is clear that the cost of our commodities in the export and home markets will be materially increased.
  In the passenger section, the outlook is even more serious. Most of the municipal undertakings are already carrying a heavy debt and finding it extremely difficult to balance their budgets. They are being authorised to increase their fares to recoup the additional taxation. This will be an extra tax upon the travelling public, who in turn will expect an increase in wages to meet the additional cost. No one denies that the increase in bus fares will reflect itself in the living standards of our people, who will be demanding wage increases as a consequence.
  It is unreasonable for the Chancellor to introduce this increased taxation at a time when it is essential to try to keep the cost of living stable. In spite of the provisions that the Chancellor is including in the Bill, the effect upon the bus companies and the municipal undertakings may well mean that the continuation of many of the services of an unprofitable nature, in country areas and the like, will have to be seriously reconsidered.
  Passenger transport undertakings cannot afford to bear the heavy burden of taxation which is placed upon them by Chancellors of the Exchequer of successive Governments. A double-deck omnibus, for example, has to bear tax amounting to about £85 a year, according to its
  78
  seating capacity, which, together with the tax of 3s. 6d. a gallon on fuel oil, represents a terrific factor in mileage costs. The fuel oil tax at 2s. 6d. a gallon has been estimated to cost the bus undertakings an average of about 3d. per mile. It is clear, therefore, that in view of the various items of expenditure confronting the transport industry, this tax will cause considerable difficulty.
  I appeal to the Financial Secretary to put before the Chancellor the suggestion that, first, he should consider whether, if the tax has to be applied, the £30 million should not be spread over the wider range of consumers of petrol and fuel oil; and, secondly, he should consider limiting the period of operation of the extra tax, so that Parliament can have an opportunity to consider whether its continuation is justified. This is an unfortunate decision by the Chancellor and I hope that he will reconsider it and decide to withdraw the Bill.
  5.58 p.m.
  Mr. John Arbuthnot: The hon. Member for Bradford, East (Mr. McLeavy) is always listened to with respect when he talks about transport matters. However, I am sure he will forgive me if I do not follow the theme of his remarks. There is one matter on which Members on all sides will be in full agreement, and that is in welcoming the statement by my right hon. Friend the Chancellor of the Exchequer that this unwelcome additional imposition will be of a temporary nature. We welcome still further my right hon. Friend's suggestion of its probable duration. When it was suggested that an appeal for permission to raise bus fares might require a period of four or five months, my right hon. Friend expressed the hope that this additional imposition would, by that time, be over.
  I want to take up a remark which the right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) made in his speech. I think he will not disagree with me when I suggest that the line of argument which he was following was that if there was rationing it was a mistake to follow it with additional taxation. I believe that fiscal policy and a rationing policy should go hand in hand, each one helping the other, each bolstering the other and making the other easier.

  79
  The right hon. Gentleman attacked the Chancellor of the Exchequer for his mixing of metaphors. I notice a magnificent one which the right hon. Gentleman the Member for Smethwick himself produced about "triggering off a demand."
  Mr. Gordon Walker: What was it?
  Mr. Arbuthnot: "Triggering off a demand."
  Mr. Gordon Walker: Oh.
  Mr. Arbuthnot: I suggest to the right hon. Gentleman that he cannot really afford to attack my right hon. Friend for his mixed metaphors.
  There is an aspect of this additional tax that may, perhaps, have escaped my right hon. Friend, and that is the way in which it impinges upon some small factories which have recently switched to oil burning. There is one example which was brought to my notice the other day. I cite it because I think it is typical of many others. This factory switched to oil burning as a result of a recommendation by the Government-sponsored Fuel Efficiency Committee. The factory was turned over to oil firing, using medium black oil of 960 degrees. To do so, the management had to obtain a loan. The loan was obtained in May, 1955—
  Mr. Nabarro: Is my hon. Friend perfectly sure that the fuel oil he is talking about for a factory's use, for heating or processing, is subject to this duty?
  Mr. Arbuthnot: I understand so. The matter was raised with me by the firm concerned just recently. If my right hon. Friend can assure me that the duty does not apply, I shall be extremely glad to hear that. [HON. MEMBERS: "It does not."] The cost of this oil has gone up since April of this year, when it was 10⅝d. per gallon, to 11⅝d. per gallon in November, and just now, in this month, by an additional 3½d.
  Mr. Nabarro: With great respect to my hon. Friend, I think he is confusing this issue. There have been increases in the costs of the fuel oil to which he is referring, but not on account of additional duty. There have been additional costs of fuel, and additional costs of distribution, but the additional cost he is talking about has no relevance whatever to the increase in the duty under this Bill.
  Mr. Arbuthnot: If that is so I hope my right hon. Friend will be able to clear the matter up when he replies to the debate.
  6.4 p.m.
  Mr. A. E. Oram: I am sure that the hon. Member for Dover (Mr. Arbuthnot) will not expect me to follow him in his argument, since I think that his premature resumption of his seat was an indication that he was a little off the mark. Instead, I would invite the House to consider the Bill from the point of view of an industry which has not been much touched upon in the debate, namely, the distributive trade. I invite the House to consider the effect that this increased tax will have in increasing the costs of transport of essential consumer goods and services.
  It may be helpful to the House if I try to bring to bear on this subject the experience of a large co-operative society in the south of England with the affairs of which I happen to be familiar. It is a society which includes in its services the distribution of milk, bread, groceries, meat, coal, laundry, furniture and other essential consumer goods. Its area includes a number of large towns and a wide stretch of countryside. It seems to me, therefore, to provide a useful example to consider. It is, so to speak, a miniature of the problem which the whole country is facing in seeking to maintain essential consumer services in the difficult situation in which we find ourselves.
  I want to make one main argument about the tax and to give two or three practical illustrations of it. My argument is that this tax can only run counter to the plans which the Minister of Fuel and Power and the Minister of Transport and Civil Aviation are no doubt making to see that the available petrol is used most in the most essential services. This tax runs counter to any sensible schemes which, one hopes, they are devising.
  The Minister of Transport and Civil Aviation, for instance, last Wednesday told my hon. Friend, the Member for Shoreditch and Finsbury (Mr. Collins) the criteria which he was suggesting to his regional commissioners as the basis for deciding whether or not to issue supplementary rations of petrol. I have studied those criteria, and I find them in the main commendable. For instance, the right hon. Gentleman assures us that such

  81
  services as the bulk movement of essential foods will be treated generously by his regional commissioners. His statement included the
  "Retail delivery of:

  (a) milk

  (b) other basic foods in rural areas or areas far from shops."—[OFFICIAL REPORT, 5th December, 1956; Vol. 561, c. 1225.]

  The delivery of house coal is another category which the right hon. Gentleman mentions in his instructions to his regional commissioners. They are all very commendable and to a large extent fairly obvious instances.
  The folly of this Bill is that the more essential services are considered to be, and, therefore, the more petrol that will be allocated to them under the rationing scheme, the more tax those services will be called upon to bear. Surely that is the reverse of justice and the reverse of common sense? It seems to me that the Chancellor is running completely counter to the efforts which his right hon. Friends are trying to make.
  I will mention one or two examples. Let us consider the bulk movement of essential foods. I am certain that the assurance which the Minister gave last Wednesday, that this would be generously treated, will be very comforting to the dairy manager of the co-operative society to which I have referred. He has, I know, and quite rightly, been disturbed by the effect upon one of his lorries which has regularly been doing 900 miles a week and using 81 gallons of petrol delivering milk in bulk. Under the ration there will be only 12 gallons for that vehicle.
  I have no doubt that there will be a generous supplement to those 12 gallons, but the effect of the Bill is to say that if an added supplement is allowed there will be an increased tax, and that journey to which I have referred will cost the dairy manager's department at least another £4 a week as a result of the tax which the Bill will bring about. In fact this tax which is called a tax on petrol will be a tax on food. In the instance which I have given, it is a tax on milk. In other instances to which I shall refer it will he a tax on bread.
  I take as a second example the delivery of house coal, which is again in the category that we are assured will be generously treated. Here is an absolutely
  82
  essential service. We cannot expect people to get their coal by any other means than having it delivered to their homes, but in the case of a lorry which I have investigated the effect of the tax will be to add another £1 4s. to the weekly cost of the vehicle, which is at present £12 10s. That is an additional impost on a service which the Government admit to be an absolutely essential and unavoidable one.
  Mr. Lewis: Surely my hon. Friend will admit that, generous as we know it to be, the co-operative society will not carry the extra cost but will pass it on, and the poor old-age pensioners will eventually pay it.
  Mr. Oram: That is the point that I wish to emphasise. These are costs which any distributor, co-operative or private, must inevitably pass on to the consumer. It is always the consumer who pays these increased costs, and although I am using a co-operative society as my example, the problem which confronts that concern is one which faces all retailers, be they private or co-operative, and it is the consumers of all categories who, in the long run, will have to pay these additional costs.
  Another category of service which, it seems to me, will suffer particularly under the Bill is the distribution of goods in rural areas. That I know to be a particularly expensive service, and here there is a distinction between co-operative service and private trade service. It is certainly true of the society to which I am referring. One often finds that the rural areas are served almost exclusively by the co-operative societies. The private trade is content to leave these more expensive runs to them. The effect of the tax is that those traders who are prepared, as is the Co-operative movement, to put service before profit and to undertake what is almost a social service in taking goods to rural areas, will now be compelled to pay an extra 1s. a gallon for the privilege of doing so.
  It seems to me that whenever there is a shortage of any commodity—and this debate arises out of the shortage of petrol—there is one principle which should be paramount, that is, the principle of fair shares. This is not a question only of fair shares in terms of physical quantities. It is also a question of fair shares in terms of the financial burden

  83
  that has to be shouldered. We shall be discussing later whether the physical quantities of petrol will be fairly shared as a result of what the Government are doing, but I suggest that the Bill has the effect of making sure that the financial burden is not fairly shared. I have tried to show that those services which the Government themselves recognise to be most essential are the ones that are most likely to carry an unfair burden.
  6.15 p.m.
  Mr. Frederic Harris: I hope that the hon. Member for East Ham, South (Mr. Oram) will forgive me if I do not comment fully on his argument. Time is pressing and I will not take the time of the House in so doing, but I want to join with my hon. Friend the Member for Cheadle (Mr. Shepherd) in his criticism of this burden. Both when he announced it, and again today when he opened the debate, my right hon. Friend the Chancellor of the Exchequer tended to play down the incidence of this tax. That was very disturbing. Over the last nine years we have heard every Chancellor of the Exchequer, when increasing the duty on petrol, rather play down its effect. I have never agreed with any of them on that point.
  If the Bill could have been justified at all, it could have been justified only on two possibilities. The first is that there was an increase in revenue which had to be obtained. I do not honestly feel that a case has been made out for that at all. No case has been made out that it is essential to raise more revenue at this psychological moment. Secondly, the increase in duty could be justified only if it was necessary to say that by putting up the price a further cut in consumption would be secured. We know that rationing is supposed to do that by itself. In any event, I would agree with the hon. Member for East Ham, South that it would be grossly unfair if that were achieved by raising the price and putting it out of reach of certain members of the public.
  The Chancellor made a strong reference to the effect that the tax will be of only a temporary nature, and so have many hon. Members. Unfortunately, many of us have realised over a period of years that when a tax of this kind is
  84
  brought in and reference is made to its being temporary, the tax eventually becomes considerably permanent and it becomes difficult to have it removed. It is much easier to have a tax imposed than to have it taken off. Therefore, I am suspicious of this reference to a temporary tax.
  In any case, if it is temporary, can we not have something definitely inserted in the Bill to say in what way it will be temporary? What is the Chancellor's view? Is it that when rationing ceases, this further burden of taxation will be removed? What does he mean by temporary? The Chancellor made a general reference to the possibility of five months or a period near to that. I concede that the Chancellor was possibly guessing, but nevertheless that period has been mentioned.
  The Financial Secretary, in winding up the debate, ought to be a little more specific for the benefit of all of us and tell us what that reference may have meant. I should like to obtain from the Government their view of what is meant by "temporary", so that we have some sort of undertaking that this unfortunate burden will be removed in due course. On every occasion when the petrol duty has been increased, whether by the Socialists or by my own Government, I have personally opposed it.
  Mr. Lewis: To the extent of voting against it?
  Mr. Harris: If it is a choice between abstaining or voting against the Government and the alternative that one day the Socialists will come into power, I am prepared to put up with a bad bargain rather than have the worst of all possible worlds.
  Mr. David Jones: The hon. Gentleman did not oppose it.
  Mr. Harris: Yes, I have spoken strongly. Hon. Gentlemen opposite know only too well that one vote on a matter of this kind will not achieve anything.
  Mr. Jones: Salve your conscience.
  Mr. Harris: If all hon. Members acted only according to their consciences, this House would be a better place. I, as an individual back bencher, have brought all pressure I can to bear on the Treasury, including putting my view clearly to the

  85
  Patronage Secretary on this matter—[Interruption.] Yes, I have conveyed clearly that I am always against an increase in the tax on petrol.
  I say that because, when extra tax is imposed on petrol, it affects the cost of every service enjoyed by the public and almost every item we have to purchase. That is the effect of such an increase, and it does not matter whether the incidence of the tax is direct or indirect. The tragedy is that such increased costs are never levelled off at the actual increased cost of the petrol tax itself; it must always be rounded off at a level figure, and that invariably means a slight extra charge on the incidence of the tax itself.
  Furthermore, I cannot see why we are involving our country and our people in such a shocking disruption at the moment. Much of the resulting effect of this tax, from a Revenue point of view, is counter- balanced by lesser returns from other methods of taxation, as my hon. Friend the Member for Kidderminster (Mr. Nabarro) said. To me it seems a most unsatisfactory procedure.
  Once again the Treasury has decided that it wants some extra Revenue. Unhappily the Chancellor and the Financial Secretary have, within reason, accepted its arguments. I should like more courage shown on these occasions, because it is bad if the Treasury decides in every instance what is right for the public.
  Mr. D. Jones: Vote against it.
  Mr. Harris: I feel strongly that this is a bad step, and that the Government have under-estimated the feeling of our people against this imposition. It was not helped when, as I have been told, over television one night the Minister of Fuel and Power conveyed the impression that there would not be an increase in the price of petrol, yet the next day there was this imposition. That did not encourage any of my constituents and I have had many letters to that effect.
  Therefore, although hon. Gentleman opposite can laugh and jeer at a person like myself registering my protest on this occasion, I can say sincerely that on every occasion I have tried to the best of my ability to oppose any increase in petrol tax, and I cannot see the justification in this instance for the country suffering once again.
  6.23 p.m.
  Mr. Douglas Houghton: It rather looks as if there is fresh trouble brewing for Her Majesty's Government. The strangest feature of this debate is that we have heard so little in support of the Bill now before the House. We listened to the Chancellor of the Exchequer, who, I thought, was very unsure of himself when he was trying to explain the reasons for this new imposition of taxation. In fact, I think it would not be uncharitable to say that the right hon. Gentleman uttered a stream of lame excuses and then left the Chamber, and we have not seen him since.
  The hon. Member for Croydon, North-West (Mr. F. Harris) and his hon. Friend the Member for Cheadle (Mr. Shepherd) were the only two hon. Gentlemen on that side of the House who attempted to examine the merits of the Bill, and both of them have come down against it. That is most significant, and it is obvious that the hearts of hon. Gentlemen opposite are not in this Bill, and small wonder.
  The first thing which they, in company with my hon. and right hon. Friends on this side of the House, want to know is how temporary is "temporary". We all know what bad things can be done on the ground that they will be temporary. The intervention in Suez was one of them, and fiscal history is strewn with promises that new or additional taxation will be only temporary. It is in line with the excuse for the baby born out of wedlock, that it was only a little one. In this context the word "temporary" may mean months or it may mean years, but hon. Members on both sides of the House would probably join me in representing to the Chancellor of the Exchequer that he really ought to attempt to put a time limit to this new taxation.
  I still have not heard what this new tax is for. Is it to replenish the Revenue, to recoup it for the loss which it would otherwise suffer on account of the reduced consumption of petrol? I cannot believe that. Last Tuesday the right hon. Gentleman the Chancellor of the Exchequer, examining his Budget prospects, the out-turn of this financial year,

  87
  and taking the figures above the line and below the line together, said:
  "The overall out-turn of the Budget will be better, not worse, than I forecast last April."—[OFFICIAL REPORT, 4th December, 1956; Vol. 561, c. 1056.]
  We all know that the right hon. Gentleman forecast last April a thumping big surplus. That was his precautionary measure against inflationary tendencies. So I really do not believe that he needs this extra taxation in order to make good Revenue for current purposes, nor can he justify it on the ground that he must restore the loss to his already large surplus.
  What, then, is this tax for? The House should note that the approach of the Chancellor to this situation seems to be, "This is an occasion when we ought to tax ourselves more. I have had a good look round to see what additional taxes I can find." I suppose that the only underlying motive for that is that we should strike an heroic posture to the world and say, "We are taxing ourselves more. We mean business. Let us have no more palsied hands holding sterling." Really is the world in need of such a bogus remedy for the fears of our financial and economic stability?
  The Chancellor of the Exchequer gave the impression, it can be no more, that had the Income Tax been a little more conveniently at hand for a change in the middle of the financial year, he might have adopted that as his vehicle of increased taxation.
  Mr. Nabarro: Then there would have been some trouble over here.
  Mr. Houghton: That is very likely, because hon. Gentlemen opposite like this indirect, regressive taxation. They know it will pass them by. They do not like direct taxation, because it comes much nearer their pockets than a great deal of indirect taxation does. The interjection by the hon. Member for Kidderminster (Mr. Nabarro) was most significant. There are two hon. Gentlemen opposite at any rate who are prepared to look at the proposal on its merits and condemn it, and probably they would be ready to approve an increase in direct taxation if that were proved to be a desirable alternative.
  88
  I acknowledge the Chancellor's difficulties in increasing Income Tax in the middle of the financial year. It is one of the great drawbacks of our pay-as-you-earn system. The Chancellor has no room to manoeuvre in relation to Income Tax in the middle of the financial year, which seems to point to all interim remedies for economic and financial crises being found in the field of additional indirect taxation. That is what we had last year, when it was pots and pans. This year it is petrol. On neither occasion could it be Income Tax; at least, not without a great deal of trouble and considerable hardship. It could, of course, be done, but there is no doubt that it would be a very inconvenient thing to do, especially at this late stage in the year.
  The Chancellor suggested to us that, after having made this survey of the field of possible additional taxation, he unexpectedly found that he could tax the very thing which had caused all the trouble. He said "Oil has created all this bother. Oil is going to be short. As I am going to lose revenue on oil, I will put an additional tax on it." What justification has the Chancellor for that? He said last week:
  "I believe that the House and the country will accept that it is right that in present circumstances a commodity as precious as oil now is should effectively be guarded by taxation as well as by rationing."—[OFFICIAL REPORT, 4th December, 1956; Vol. 561, c. 1057].
  How is petrol to be guarded by this taxation when most people are preparing to use as much of it as they can lay their hands on and pass as much as they can of the additional tax on to somebody else? Can any hon. Member say that he believes that less petrol will be used by reason of this taxation? I do not for a moment believe that it will.
  Mr. Lewis: Just a few small middle-class people, like school teachers, will use less, but not the big businessmen.
  Mr. Houghton: My hon. Friend has taken the words right out of my mouth. There will be small, helpless, users who may be compelled to use less oil because of the price, apart from being compelled to use less because of rationing. The Labour Party has always believed that it is much better to ration by coupon than by the purse. When it is proposed to do both, there has to be overwhelming justification for it.

  89
  The really serious aspect of the matter is that referred to by the hon. Member for Cheadle, the psychological impact of the tax upon a restive people. The British people have gone through a very miserable time lately. They are feeling very upset. Workers are feeling very apprehensive, and beginning to wonder whether it is time to drive the stakes in on their defences and, indeed, whether to advance in order to defend. There is no doubt that the Chancellor and the Government face a very troubled working community.
  This additional tax, which will seep through the whole economy and reach everybody in time, and a lot of people quickly, will stimulate demands for increased wages. I never incite wage claims in the House, and generally deprecate references to them, because the trade unions are in charge there, but it is no good blinking at what is obviously now spreading through the trade union movement, a fear that the additional petrol duty will be made an excuse for increased prices everywhere. As the hon. Member for Croydon, North-West said, they are likely to be increases which will go beyond the immediate necessities of the situation. It will be an opportunity to make something on the side out of the additional tax.
  The House would also like to know why it is that since the additional tax was announced the queues at the garages and petrol stations have stopped. Was it that all those who had petrol were hanging on to it in case there was an increase in price or an increase in tax? A lot of money has been made out of the situation in the last few days. Storage tanks were being kept full. Not only motorists were trying to keep their tanks full. Petrol station owners have tried to keep their tanks full in order to be on the safe side. Then something happened, and they will now reap a considerable harvest.
  There can be no hesitation on the part of my right hon. and hon. Friends in voting against this bad Bill which imposes a bad tax. That is the long and the short of it. We hope that hon. Members opposite who agree with us will join us in the Lobby. I hope that one day right hon. and hon. Gentlemen on this side of the House will have the courage to act similarly.
  6.37 p.m.
  Mr. A. E. Cooper: I spoke last week when this subject was raised late one evening, and my views are well known to the House. I regard the tax on petrol and light oils as regressive and harmful to our economy. It is no less harmful because it is imposed by a Conservative Government than it was when it was imposed by a Labour Government. However, it does not lie in the mouths of right hon. and hon. Gentlemen opposite to criticise a Conservative Government too much, because Sir Stafford Cripps imposed a duty of 9d. per gallon for no other reason than that our petrol happened to be the cheapest in Europe, which was never a good reason for doing it.
  Some countries have certain advantages in their trading position. We have always had the advantage that our oil and petrol were lowly priced, and that offset to a very great extent the disadvantages that we suffered in high wages costs, and one or two other factors, and balanced industrial capacity in export markets.
  One would have thought that the first thing the Treasury would think about was how it could help British industry, but that seems to be the last thing it ever thinks about. In fact, one is tempted to ask whether those inside the Treasury have ever heard of British industry and the handicaps under which it works.
  The hon. and gallant Member for Hull, West (Captain Hewitson) referred a little earlier to light oils, which constitute a very important raw material for a great number of our industries. Let us have no illusion about the tax on light oils. It was originally imposed by accident. It brought in a lot of money to the Treasury, and Government after Government, both Labour and Conservative, have refused to do anything about it. It is the only raw material of industry which is taxed.
  There is some drawback under Section 9 of the Finance Act, 1932. Under that, if white spirit, or any of these hydrocarbon oils, loses its identity during a manufacturing process, the manufacturer can reclaim the full extent of the duty. Let us examine what we have to do. We have to fill up a form giving complete and minute details of the type of plant we use. We then have to give away to the Treasury—I must confess it has never

  91
  broken a confidence, but the fact is that we have to do it—complete details of all our manufacturing processes, even though they may be secret. We then have to get approval from the Treasury on theoretical grounds that the process itself in fact causes the hydrocarbon oil to lose its identity. We then have to build a special place in which to store the raw material which we buy bonded. We have to keep minute records, quite distinct from all other records which we keep in the factory; twice a month an inspector from Customs and Excise visits the factory, examines the record, we fill up the requisite forms, and in two months' time we get back the tax we have paid.
  Industry has had to be put to all that expense to deal with hydrocarbon oils. The time has come when we should get rid of this nonsense and not allow industry to be taxed on its raw materials. Of course, we get a rebate when we export goods in which these light hydrocarbon oils are used, but no allowance is made for any loss which may be sustained during manufacture and no account is made for the fact that not one of our overseas competitors is saddled with this sort of burden.
  We should help industry to the maximum of our ability. I take the view, which may be old-fashioned, that the country's entire prosperity is built on the prosperity of British industry and in no other way. The Government, whether Conservative or Labour, make no real contribution to the nation's economy. In fact, the more civil servants we have and the greater Governmental interference in industry the less likelihood there is of a prosperous industry. I therefore view with the gravest apprehension any increase in our taxation at the present time.
  The argument about the Treasury wanting increased revenue is irrelevant. I want to refer to the point made by the hon. Member for Sowerby (Mr. Houghton). The sole justification for the imposition of this exta 1s. is the stopping of the panic buying at pumps all over the country. It had become a point of honour with every motorist to ensure that his tank was full and was kept full up to 17th December. I do not blame anybody for doing that sort of thing, but the net result of the policy undoubtedly would have been that on 17th December the
  92
  garages would have been unable to honour the ration.
  The effect of this new burden will be an eruption on the plateau. It is not just a matter of the £30 million which the Treasury hopes to get from this increase. I want to give an example of the accumulation which in the end brings about greater costs than the initial tax itself. Raw materials going to factories will carry a surcharge of 7½ per cent. as a result of this new impost. The processes may involve the use of raw materials which are taxed at an additional 1s. per gallon. Goods to be shipped to customers will bear an additional 7½ per cent. in freight costs. If a basic raw material is sold, the customer will be processing that into a product which he sells to the retailer and then to the customer, both carrying increased freight rates of 7½ per cent. The net result is a much greater impost than is laid down by the extra 1s.
  1 support the Chancellor in this issue for one reason only. [Interruption.] I made this point quite clearly the other night, and I make it again now. It is simply that he has told us that this is to be a temporary Measure and a temporary Measure only. Hon. Members on this side of the House will need to be assured in Committee about the meaning of the word "temporary." I know that some of my hon. Friends will wish to put down Amendments limiting the period of operation of the Bill.
  6.46 p.m.
  Mr. J. T. Price: I have no intention at this late stage in the debate of entering into polemical topics which are wide open to any hon. Member. This afternoon the Chancellor was in a genial frame of mind. I had the pleasure of listening to his speech and to many others. The impression I gained was that he knew that he was on a sticky wicket and that it was therefore a good thing to adopt an avuncular attitude towards the House.
  He was presenting the first instalment of the bill for the Suez adventure, and there will be many more bills, I am sorry to say. The economic consequences of this adventure are only beginning to reveal themselves to the man in the street, who is very anxious about them. I will avoid the temptation to discuss questions of ethics and morality which are wrapped up in matters of this kind and restrict myself in a couple of minutes to two

  93
  points which I am entitled to raise because the Chancellor was good enough to give way to me during his speech.
  The only logical reason for the imposition of this extra tax of 1s. per gallon—plus an additional 5d. on distribution costs payable to the retailer and wholesaler—which we have had from the benches opposite is that it will help to recoup the Treasury for the £30 million which it is estimated the Treasury will lose in revenue between now and the end of the financial year. I have taken the trouble to do a little arithmetic. I was not able quickly enough to do it mentally when the Chancellor was speaking this afternoon. I have broken down the figure of £30 million and, in all seriousness and modesty, I hope that my figures will be investigated.
  The figure of £30 million represents 600 million gallons of petrol. The House is well aware that of all the vehicles now travelling the roads of Britain approximately 80 per cent. are commercial vehicles or passenger vehicles, chargeable to some business account because they are used in the course of trade, industry and commerce. They certainly use more than 80 per cent. of the total consumption of petrol in this country, because the margin of 20 per cent. represents motor cars used for private pleasure and the ordinary amenities of civilised life which do not consume so much per vehicle as vehicles used in the course of commerce. For the sake of my argument, I will restrict myself to 80 per cent.
  Let us consider this matter from the point of view of the fiscal policy of the Government in relation to other forms of taxation. Eighty per cent. of all the petrol bought at the pumps for lorries and cars will be charged back on the expense accounts of the companies running those vehicles. The next stage of the process will be that the companies will charge back those expenses to the Treasury without paying tax under the Schedules relating to Profits Tax and so on. I am restricting my argument to the 600 million gallons, representing the £30 million of revenue to which the Chancellor referred. Eighty per cent. of that will be charged back, and if it is charged back at the standard rate of 8s. 6d. in the £, at the end of the first stage of the process £12·8 million of the £30 million will be paid back in refunds or allowances of
  94
  tax to the business accounts of those who are liable to the Treasury during the accounting period.
  There is one other effect of this situation. If my argument upon this is wrong, I hope that somebody at the Treasury will pull it to pieces and that the Chancellor will take the opportunity of putting me right. The Chancellor gets the benefit of the penal tax of 1s. per gallon, but another 5d. per gallon is stuck on because it has been agreed to by the Minister of Fuel and Power in the course of some high pressure negotiations which took place between the Minister and the oil companies. A result was obtained in this case much quicker than any other results from negotiations have been obtained while this Government have been in office. I shall need a lot of convincing that the 5d. can be justified by any rational system of costing which can be produced in this House.
  It means that 80 per cent. of all the 5ds. will be charged back to the Treasury on taxation accounts. I estimate that over £4 million will have to be repaid by the Treasury in that respect. In other words, of the estimated £30 million loss of revenue as a result of the diminution of petrol supplies in this emergency period, £17·1 million will be refunded in taxation in one form or another, and the rest will be passed on to the consumer in increased costs of goods and services for which the public has to pay.
  I submit that this is an honest and logical argument which should be looked at very closely. Under the stress of this emergency situation this country has found itself in a position in which the Chancellor has to say, "We have all sinned. Let us throw our pennies on the ground, like the Salvation Army"—a penny on the drum representing 1s. on the cost of petrol. Are we honestly going to try to justify a further step in the inflationary spiral if, as a result of the Government's policy, they have not only thrown the country into great difficulties but also failed to produce the results which we are told this tax would produce?
  Like my hon. Friends, I am utterly opposed to the Bill. This is a bad tax. I have no confidence in the assurances that it will be a temporary tax, because I still have a feeling that the old dictum of Adam Smith, who said that an old tax is no tax at all, still applies in relation to

  95
  our fiscal policy. We shall have to make ourselves much more vocal if we are to see the end of this tax once it is placed on the Statute Book.
  6.54 p.m.
  Mr. Anthony Marlowe: The hon. Member for Sowerby (Mr. Houghton) said that he had not heard many speeches from hon. Members on this side of the House in support of the Bill. I can assure him that he will not hear one now. I find the Bill quite incomprehensible. That, perhaps, is not surprising, because I never have understood much about economics. Economists and I do not speak the same language. I do not think that any economist speaks the same langauge as the ordinary man in the street.
  I have always understood that there were only two main purposes for taxation—one to raise revenue and the other as a weapon of financial control to have some effect upon consumption. The Chancellor has made it perfectly clear in the last few days that he does not need this tax for revenue purposes—and we do not need financial controls over consumption when we have rationing. So I have not been able to understand what is the purpose of the tax. I cannot help feeling that it is another example of the usual attitude of the people at the Treasury, who have woken up one morning and said, "We are going to lose some money over this, so we must make it good somewhere else." The Treasury never likes to lose a source of revenue if it can possibly help it.
  The point which I want to raise is one which aroused a good deal of interest at Question Time today. I shall have to deal with a different aspect of the matter, because the effect of rationing upon provincial taxi-cabs is out of order during the Second Reading debate. But the Preamble allows for the raising of certain fares on certain specified vehicles. Clause 2 deals with that question, limiting the increase in fares to public service vehicles.
  From the passages which took place at Question Time today it was quite evident that the Minister of Fuel and Power has not begun to understand the effect of this tax upon the provincial taxi-cab services. They will be very badly hit and will very likely be reduced to entirely uneconomic
  96
  services. Many taxi drivers will be driven out of emploment, and a useful public service will be seriously curtailed.
  In London, there is provision for any increase such as is created by the Bill to be passed on to the consumer by way of increased fares. The Home Secretary has power to deal with this matter. In the provinces many local authorities have their own Acts of Parliament, which also enable them to permit increases in fares, in order that taxi drivers may recoup themselves for the extra expense to which they are put by this taxation.
  But there is a certain class which appears to have been overlooked by the Government in the drafting of the Bill, namely, the non-county boroughs. The man who drives a taxi-cab in a non-county borough is not able to obtain any increase in his fares without the passing of a byeleaw by the local authority, and that byelaw cannot come into operation in less than six or eight weeks. The byelaw has first to be approved by the local authority and must then go to the Home Office for sanction. It is therefore a very considerable time before any byelaw permitting an increase in fares in such areas can come into operation.
  Taxi drivers in those cases will, therefore, have to go on paying the higher cost of petrol for a long time before they can begin to raise their fares. They cannot make the increase retrospective, so they will be seriously out of pocket over the period and that will have an extremely adverse effect upon them, upon employment in their industry, and also upon a service upon which the public rely, especially in provincial boroughs.
  I hope that the Chancellor will bear that point in mind and incorporate in the Bill some power enabling the byelaw procedure to be by-passed, so that local authorities which are affected can bring increased fares into operation immediately, as bus companies are allowed to do under Clause 2.
  I endorse what has been said by so many hon. Members on both sides of the House. If this is to be a temporary measure, I cannot see why that should not be written into the Bill. As was said, there have been dozens of occasions when we have heard the story that a tax was only temporary, but somehow it never proved to be so. The only way

  97
  for us to ensure that this really is a temporary tax is to have written into the Bill that it shall come to an end at the same time as the rationing of petrol. If that be done, a number of hon. Members on this side of the House, who are by no means enthusiastic about this Bill, will feel that at least there is something in it to which we might give our support.
  7.0 p.m.
  Mr. John Rankin: The Chancellor has now returned to the Chamber—I realise that he had good reasons for being absent—and I am sure it will delight him to know that during his absence not a single word of support for his Bill has come from hon. Members opposite. That is also true of hon. Members on this side of the House. The right hon. Gentleman of course would expect that, but it may surprise him to know that both the 1s. tax and the temporary nature of the provision have been violently criticised from his own side.
  Some of his hon. Friends have shown themselves very suspicious of the temporary provision which the right hon. Gentleman has inserted in the Bill, and rightly so, because many of us recollect that Income Tax was first introduced as a temporary provision. I assume that it still is a temporary provision, although it has become a permanent part of our taxation system. The same applies to Purchase Tax. That also was brought in to meet an emergency, but it is with us as a permanent feature of our social life. In view of these things, if this is to be a Bill making the tax a temporary provision, then, as has been said by hon. Members on both sides of the House, the Chancellor will convince us of that only if he inserts into the Bill a time limit during which the provision will operate.
  Hon. Members on both sides of the House can understand the need for safeguarding our oil supplies by rationing, but the need for the 1s. tax has not been justified by the Chancellor. On 8th December, the Manchester Guardian commented:
  "There seems to be a kind of general post at the moment, in which everyone who can contrive to pass on his share of the bill for Suez is making haste to do so."
  In this case, the "general post" has been headed by one of the chief criminals. Having incurred the damage, he is now
  98
  passing on the payment to other people. It is worthwhile noting the train of results which will flow. As an outcome of the 1s. tax, the producer of oil is safeguarded by an increase of 3½d. The distributor is safeguarded by an increase of 1½d. The consumer has to pay. As a result of the Chancellor's impost, British European Airways this morning intimated a rise of 1s. in the £ on its fares. The Transport Commission has indicated that its road delivery charges will carry a surcharge, and under this Bill we are giving bus undertakings the right to increase charges. In every one of these cases the charge is to pass on to the consumer.
  The Chancellor defends that on the ground that the total cost will be very small. But the right hon. Gentleman forgets that at this moment bread prices are probably going up; that rents are under review and that they will go up; that subsidies, at least in Scotland—the problem of subsidies may be settled in England—are to be reduced, and therefore there will be a further increase in rents on that account. Recently we have had other increases, such as the increased charge for prescriptions, and so on. The end of all this will be a very steep increase in the cost of living which will react on our export trade; and as a further consequence there will almost certainly be a demand for higher wages. These are the considerations which present themselves to many of us. In view of their criticisms, I feel that we on this side of the House are entitled to expect that hon. Gentlemen opposite will translate their criticism into support for us in the Division Lobbies.
  I wish to refer to another example of how the cost of living will be affected on the distributive side. My hon. Friend the Member for East Ham, South (Mr.Oram) has already referred to the matter. I have received an account of the impact of this increase in the cost of petrol on the transactions of a co-operative society which operates mainly in the rural areas. At present the society uses 3,608 gallons of petrol a week to complete its deliveries of dairy produce, coal, bread, meat and so on. As a result of the allocation which it will now get, there will be a short-fall of 1,968 gallons of petrol a week, which will prove a serious handicap to the society. All consuming members of the

  99
  society will experience an increase in the cost of living because they will now have to pay bus fares and do their own shopping owing to the lack of delivery services.
  The increased cost of petrol on a great society like the London Co-operative Society will result in a rise in costs of £50,000 a year. To the South Suburban Society it means £15,000; to Lincoln it means £13,000. All these things will create a state of affairs which is bound to enforce the demand for increased wages throughout the country. I had hoped that that was something which the Chancellor would seek to avoid at this time.
  In regard to coal delivery, these will now cost the South Suburban Society 30s. extra per vehicle every week. In Watford the cost of coal will go up by 1s. 3½d. per ton. The Enfield Highway Society tell us that their bakery costs will increase form 2s. 2½d. to 5s. per sack. These are facts which people at the consuming level have to face, in whatever way they use transport, either for themselves or their goods. The facts will face them every time they seek to replenish their larders. There is a danger that the Chancellor, in trying to make others pay for his mistakes and the mistakes of his Government, will seriously affect our economy.
  If Government supporters who are with us in this criticism want to do the country a service they should join us in the Lobby and refuse to give a Second Reading to the Bill.
  7.11 p.m.
  Mr. Gerald Nabarro: I shall disappoint the hon. Member for Govan (Mr. Rankin).
  Mr. Rankin: That is nothing unusual.
  Mr. Nabarro: I am very critical of the Bill, and I consider that the only possible justification Conservative Members can have in voting for it is the inclusion of the words "temporary increase" in parenthesis in the title.
  Practically every hon. Member from either side of the House who has spoken has asked the Chancellor what he means by "temporary". I was captivated by my right hon. Friend's reply on 4th December, and I have been poring over it ever since. I have been trying to determine exactly what he meant. My
  100
  hon. Friend the Member for Cheadle (Mr. Shepherd) asked the Chancellor of the Exchequer:
  "Will he give an assurance that as soon as petrol rationing is over, or at some other convenient time, this additional taxation will be removed?"
  The Chancellor of the Exchequer then replied:
  "I used the word 'temporary' advisedly, but, of course, all taxation is subject to the review of the House each year. I regard it as an emergency tax. The simple answer to the question is that if the flow of oil returns in full, then, at the old rate of tax, the Revenue will be sustained."—[OFFICIAL REPORT, 4th December, 1956; Vol. 561, c. 1065.]
  Of course the revenue will be sustained. I have not any doubt about that at all. Moreover, I would not expect my right hon. Friend, answering a supplementary question in the Press of events at that moment, to give a precise definition of what he had in mind. However, on the Second Reading of this Bill we ought to be given more substantial assurances than were contained in what I deem to be a somewhat disingenuous answer to the supplementary question.
  I would like to see a definition written into the Bill in Committee, not simply to the effect that the additional duties will end when petrol rationing ends. That does not suit me, for the reason I gave when I intervened in the admirable speech of the hon. and learned Member for Cardigan (Mr. Bowen). If, as an interim measure, petrol rationing were relaxed, pending abolition of rationing, and the ration were increased, there would be a clamant demand from all sides of the House for a commensurate reduction of duty and we should be further in the mire of economic disabilities and complexities than ever.
  Sir Frederick Messer: That would by typical.
  Mr. Nabarro: I have not seen the hon. Gentleman in the Chamber all this afternoon. Now he says, "That would be typical." It was very typical of his Government between 1945 and 1951. For my part, I want to see a provision written into the Bill that the duty at the increased rate shall be chargeable only for a period of six months and that therefore the Bill will have effect only for six months. If the Chancellor then wishes to continue the extra duty he must bring before the House a repetitive Bill to secure the extension.
  Mr. Harold Lever: I have followed the hon. Gentleman's argument with considerable interest and some sympathy. I was not here this afternoon, but I hope I can continue to enjoy the pleasure of hearing what the hon. Gentleman has to say. I hope the hon. Member does not object to my hearing the rest of his speech.
  Mr. Nabarro: Not at all. The hon. Member is customarily loquacious—for two hours and 39 minutes on one occasion, if my memory serves me correctly. He was not here this afternoon. The remark I made merely related to my intervention in the speech of the hon. and learned Member for Cardigan. It was a very relevant intervention, as the hon. Member for Cheetham will agree when he reads it in cold print tomorrow morning.
  I have dealt with the inclusion of the words in parenthesis in the title of the Bill. Now I want to say something about the very marked effect that the additional duty is bound to have upon our national economy. References have been made to every kind of increase in cost. I make the simple point that this additional duty must be highly inflationary in its incidence for three principle reasons. The first reason is that it will greatly increase the cost of distribution. It is significant that British Road Services announced within 24 hours of the Chancellor's statement last Tuesday that it would put its charges up 7½ per cent. In my calculation the additional duty would not justify an increased cost of 7½ per cent.
  Mr. Ernest Davies rose—
  Mr. Nabarro: I know in advance what the hon. Gentleman is going to say. I intend to be completely fair and to say what the private hauliers have done. I was at the point that even so inflationary a twist as 7½ per cent. on distribution costs of all commodities, manufactured goods, foodstuffs and the like must be very damaging indeed. Immediately afterwards, the private hauliers followed with the pronouncement that they proposed to increase their charges by 10 per cent. Secondly, I believe it will be inevitable that next Monday my right hon. Friend the Minister of Fuel and Power, when he responds to my Parliamentary Question about the cost of house-coal will have to
  102
  concede that as tens of millions of tons of coal—very sadly—are distributed in this country by road transport, not only the 31 million tons that go to householders and the 30 million tons of coke that go for heating and associated purposes, but the millions of tons that go to power houses from both deep-mined and open-cast coal mines, and to gas works by transport, will all have to be subject to an increase in price because of the greater petrol duty. This increase in the cost of coal will be highly inflationary.
  The third reason, which has not been mentioned in this debate so far, is that farming uses no less than 177 million gallons of petrol or petroleum products and that in aggregate the additional duty of 1s. will cost a notional extra figure of £3·85 million, subject only to a reduction in the consumption of petroleum products on account of rationing. Therefore, in road distribution charges, in the cost of delivering coal and in the cost on farm output, we have a highly inflationary tendency.
  Though the intentions of my right hon. Friend are, as always, impeccable and irreproachable, in that he proposes to take his 1s. off again at a reasonably early date, can we be assured that all these other consequentially increased costs will be brought down? Will the cost of coal to the retailer, the cost of food and road haulage charges be brought down? Will the inflationary tendencies which are consequential upon this increase in duty be dealt with in due course? I very much doubt it.
  Mr. Lewis: I agree with every word the hon. Member has uttered, but will he also add that the Post Office uses a lot of oil and petrol and that postal charges for telephones and the rest will have to go up?
  Mr. Nabarro: I am not sure of that, because the Post Office is, of course, earning a very substantial surplus under the wise guidance of my right hon. Friend the Postmaster-General.
  I want to add a final word on the revenue aspect. My right hon. Friend suggested that he had to recoup revenue at the rate of £6 million a month following diminution in consumption of petroleum products as a result of rationing. Whether the hon. Member for Westhoughton (Mr. J. T. Price) was

  103
  correct in his arithmetical calculations or not—personally, for reasons I will not go into now, as I have no wish to delay the House, I think he was incorrect in those calculations—what undoubtedly is the case is that the overwhelming majority of motor cars and practically all the goods vehicles are operating for business purposes.
  At least three-quarters, and possibly more—I used this point in the intervention which my right hon. Friend allowed me to make in his speech—at least 75 per cent., and possibly 80 per cent., of those vehicles will be able to charge the additional cost of petrol, through the accounts of the business undertakings owning them, as a legitimate charge for the purposes of computing liability both to Income Tax and Profits Tax. That, in my opinion, will practically destroy—I use the words literally—from the Chancellor's point of view any prospect of deriving the compensatory revenue mentioned in the statement he made.
  Mr. J. T. Price: Before the hon. Member for Kidderminster (Mr. Nabarro) winds up his speech, I should say that I think he and I are thinking on similar lines, but, since he has challenged my figures, it would be only fair to me and to the House—because it is on record—if he disagrees with the figures at least to tell us where they are wrong. He should not merely make an empirical statement that they are wrong, but show where they are wrong. If they are wrong, I shall be glad if he will correct them.
  Mr. Nabarro: That would involve me in a long and detailed explanation, but I will happily give the hon. Member the details afterwards. May I add, and I say this with sympathy towards the views of the hon. Member, that I do not think he had sufficient regard to the fact that a large part of the increased distributive costs caused by the greater duty will be recouped by higher prices. I will vote for this Bill on Second Reading tonight—[HON. MEMBERS: "Oh."]—not with great enthusiasm and with a heavy heart. The hon. Member opposite who was jeering at me was not in his place at the beginning of my speech—
  Mr. Ross: I am sorry, I was.
  Mr. Nabarro: —Even if there is any justification for the Bill, it can only be because of its allegedly temporary character.
  Mr. Ross rose—
  Mr. Nabarro: If the hon. Member will allow me to finish. On the Committee stage, I shall ask the Chancellor, and in view of what they have said I hope a number of my hon. Friends will press the Chancellor, to be much more precise in what he means by "temporary". I hope he will tell us something which will be a great deal better than the reply he gave to the supplementary question to which I referred and which I considered was somewhat disingenuous in character.
  7.24 p.m.
  Mr. Harold Wilson: I think the whole House, with the exception of the Treasury Bench, will agree that this has been a very interesting and rewarding debate. Since half past three, in less than four hours, eighteen right hon. and hon. Members have spoken. I have been present for practically the whole time, and I think it interesting to note that not one hon. Member has given any practical support to the Bill.
  The one who came nearest to doing so was the hon. Member for Dover (Mr. Arbuthnot). I think that if he had been able to develop his case a little further, he might have expressed himself in favour of the Bill, but he got out of order and had to sit down. That left the Chancellor with no practical support, even from his own side of the House. It is now clear, or should be to the Chancellor, that there is no more enthusiasm on this side of the House nor on his side for this Bill than there was for his predecessor, a year ago, when, it will be remembered, every hon. Member who spoke attacked the increase in Purchase Tax.
  A number of hon. Members opposite, including the hon. Member for Kidderminster (Mr. Nabarro), have said, "We think we can just about vote for this Bill because it is temporary and in its title—although nowhere else—we find the phrase, 'Temporary Increase'". I have indicated to hon. Members opposite that if by any mischance this Bill gets a Second Reading this evening—I am hoping to produce one or two reasons

  105
  which may persuade even hon. Members opposite why it should not—later in the week it will be our intention to move Amendments which will have the effect of ensuring that this is a temporary Measure. Therefore, we hope to see hon. Members opposite not merely speaking, but voting in favour of Amendments which might limit the Measure to the four or five months about which the Chancellor spoke, or may be a reasonable request to the Chancellor that this temporary increase should be withdrawn, say, thirty days after he receives a certificate from the Secretary-General of the Canal Users' Association to say that the Canal is now open.
  The debate has covered a very wide field; petrol supplies have been mentioned, there have been one or two references to rationing—which were not encouraged by the Chairman—to inflation, to the cost of living, road haulage, bus fares, the effect on industry and on agriculture and, of course, the general Budget prospects facing the Chancellor. What we have not had, in any speech, has been any adequate reason for this Bill being brought forward. I had hoped that the Chancellor, who opened the debate and spoke for forty minutes, would have given us some better reason for the Bill—he spoke for forty minutes, including a number of interruptions—
  Mr. H. Macmillan: I did not speak for forty minutes.
  Mr. Wilson: The Chancellor says that he did not speak for forty minutes, but, including the interruptions to which he gave way, I think the time taken by his speech was forty minutes.
  I had hoped that the right hon. Gentleman would give us some reasons for the Bill. Last week he told us that the purpose was to "buttress this precious liquid"—a phrase which, I think, has caught the imagination of the House—but the only two arguments which were advanced were, first, that it would help to economise in the use of oil supplies and, secondly, to some extent that it would counter inflation. What the Chancellor is doing—I think I made this point as soon as he announced this Measure last Tuesday—is to supplement coupon rationing by a system of rationing by the purse. Why is he doing that? Is it that he has no confidence in the rationing
  106
  scheme which the Minister of Fuel and Power is introducing?
  Admittedly, as we shall be pointing out in a few minutes, the Minister of Fuel and Power has produced a most unfair and chaotic rationing scheme. I should be out of order, of course, to attempt to debate that now. When we debate it later we shall have no power to amend the scheme which will be before the House. Although that scheme is certainly a monument to the incompetence of the administration of the Government, I think it right that we should all take the view that if oil supplies are short rationing by the coupon is fairer and better than rationing by price.
  Of course, there is no doubt that oil supplies are short, and the whole country understands why oil supplies are short. The whole country understands where the responsibility lies for oil supplies being short. Therefore, we have a rationing scheme, but why do we have rationing by price as well? I suggest it is either because the Chancellor is afraid that the rationing scheme is going to break down—he has had a look at the scheme produced by his right hon. Friend and sees that it is not going to work very well—or it may be because the Government have miscalculated the oil supplies, miscalculated the ration, and the Chancellor is hoping to cut consumption still further below the coupon entitlements.
  Of course, the Chancellor gives us another reason for his introduction of this Measure—the need to counter inflation. Despite his brave words about his Budget prospects last Tuesday, he needs taxation, he tells us, to make up for the loss of the petrol revenue. His Budget has been thrown out of balance, and this is his "autumn Budget." Of course, the Chancellor is far wiser in his generation than was his predecessor, the Lord Privy Seal. The Lord Privy Seal made the mistake of going into Committee of Ways and Means, announcing that there was to be an autumn Budget and inviting the hostility of the entire House.
  The present Chancellor, when he decides on an autumn Budget, is much cleverer than was his predecessor. Indeed, he justifies all the generous and openhanded remarks which his predecessor had uttered—"his most able successor" we hear him say. So we have the

  107
  Chancellor now, much wiser and much more clever, coming to the House, making a statement after Questions, and slipping into the Order Paper a Ways and Means Resolution, and then bringing in a one-Clause Finance Bill. But he is much too clever to call it a Finance (No. 1) Bill or a Finance (No. 2) Bill. Instead, he calls it the Hydrocarbon Oil Duties (Temporary Increase) Bill. I am sure that the Lord Privy Seal, looking back on the disasters of last autumn, will wish only that he had had the ingenuity to play it that way and to introduce the Purchase Tax (Permanent Increase) Bill at that time.
  The Chancellor's fears, which he expressed this afternoon, are, of course, that petrol users both direct and indirect—that is motorists, would-be users of taxi-cabs who cannot get taxi-cabs because of rationing, housewives whose goods are not delivered to their homes, football supporters who find that there is no bus to take them to the match—everyone, in fact, who would have been using petrol directly or indirectly and cannot now do so, will all have some spare purchasing power. He wants to mop up this spare purchasing power, and no longer having available to him the estimable advice of the former Economic Secretary, has to decide for himself how to do it.
  Once he has decided—and I put this to him seriously—that he has to raise tax revenue at a rate of £100 million a year, I do not say whether rightly or wrongly, it becomes no longer a question of petrol at all. It becomes a Budget question, and he should be weighing up one potential source of revenue against another. One can just hear him asking this question, "Where can I turn?"
  The task was not easy. Under this Government, public expenditure has risen at a record rate. We are told by the Treasury that public expenditure, which was £4,457 million in 1950, has risen to £6,186 million in 1955. That is an increase of £1,729 million—an increase of 39 per cent. in public expenditure. The Government were elected on a pledge to reduce public expenditure. Therefore, against that background, it was not easy for the Chancellor to find any remunerative sources of taxation.
  108
  Furthermore, the Chancellor made very clear last Tuesday that he needed the revenue quickly. That is why he told us that he could not increase Income Tax. He did treat us to some very unusual and unorthodox speculations about the next Budget—we wondered whether he was to go on and tell us the rest of the Budget. But it was clear that an Income Tax increase would not work with sufficient speed. I have no doubt that he must have been tempted, as was his predecessor, to increase Purchase Tax. Then he remembered the Lord Privy Seal and those long, and sometimes all-night sittings last autumn, and what happened at 8 o'clock one Thursday morning. So he decided that to increase Purchase Tax was not the way to proceed, because although it is quick in action, it is not quick in respect of Parliamentary time.
  So this tired, demoralised Chancellor took the line of least resistance—
  Mr. Ellis Smith: Demoralised?
  Mr. Wilson: —he went for petrol, including derv, white spirit and all these other products that are used in industry, and are covered by the hydrocarbon oil duties. A number of hon. Members have referred to some of those.
  The right hon. Gentleman did it, he told us, to fight inflation. I must remind the Chancellor, as so many hon. Members in all parts of the House have done, that in terms of pushing up prices and starting a wage-price spiral he could not have found a more damaging tax than this one. It is just the way to encourage inflation.
  One thing is clear, and I hope we shall get some reply on this point, and a clear assurance. I do not think that the Chancellor consulted his colleagues very fully about this. Just as we understand that the Prime Minister committed himself to the Suez adventure without Cabinet backing, so I think it is quite obvious that the right hon. Gentleman failed to consult his colleagues about this increase in taxation. I say that because they are all on the record. I do not think that there is a tax about which more of his right hon. Friends have addressed the House than this one.
  Perhaps I should remind the House for a moment of the facts about this. In 1950 Sir Stafford Cripps raised the duty

  109
  by 9d., from 2s. 3d. to 3s. in order to save dollars. That was when the Labour Government took off rationing. This Government introduce rationing one week and introduce the duty the next. Not content with giving the motorist a black eye, they want to give him a thick ear as well. In 1951, my right hon. Friend, the Leader of the Opposition, raised the duty by a further 4½d.—a very modest increase compared with this one. That, together with other charges, raised the price of petrol to 3s. 6d. a gallon. Happy days. I would remind the Chancellor, that it was 3s. 6d.—not 6s.
  In those debates, when, as I say, we were debating petrol prices of 3s. and 3s. 6d.—not 6s. 1½d.—we had the whole celestial choir of right hon. Gentlemen opposite joining in the debates—all of them, including such noble Lords as Lord Crookshank, Lord Conesford, Lord Chandos—then Mr. Lyttelton—the present Lord Chancellor, and many others who have left us for another place. I should have thought that the Chancellor would have consulted his colleagues about the views which they expressed with so much eloquence and vigour—and so late at night—on those occasions. Perhaps the Chancellor will tell us—and I shall be very ready to give way when he is ready to tell us—that he did consult his colleagues.
  I can just imagine, for example, the telephone wires buzzing between Treasury Chambers and Goldeneye in Jamaica a week or two ago on this question. I can well appreciate that the Prime Minister would have wanted to remind the Chancellor of the words which he, the Prime Minister, then deputy Leader of the Opposition, used in the debate on the Second Reading of the Finance Bill, 1950. In case it was a bad line and the Chancellor was not able to hear what the Prime Minister was saying, it might be useful for me to remind him of the words then used. The present Prime Minister, referring to the petrol tax and the tax on commercial vehicles, said:
  "They both constitute further burdens on the cost of production at a time when we should be doing all we can to reduce those costs so that we can continue to compete successfully in export markets. These duties"—
  he then said, six years ago—
  "will also inevitably prove for many millions of people an addition to the cost of living, which just now, above all things, we surely
  110
  want to avoid. We shall, therefore, as I said at the beginning, continue our opposition to these duties."—[OFFICIAL REPORT, 16th May. 1950; Vol. 475. c. 1034.]
  That was when petrol was 3s. a gallon. I wonder whether the Prime Minister is still continuing his "opposition to these duties"?
  Then there is the Foreign Secretary. In those days of 1950, as the House may remember, the Foreign Secretary was a frequent spokesman on financial affairs. In those happy days of 1950 and 1951 he was one of our leading financial critics. May I say that the finances of this nation would be in a much better state today if the Foreign Secretary were still only a financial critic and not Foreign Secretary?
  This is what he said, in 1951, on the Second Reading of the Finance Bill:
  "Now I come to one or two of the specific tax proposals, first of all the tax on petrol. That is a directly inflationary tax."
  Then he gave some figures about the burden of road haulage taxation, continuing:
  "It is time that someone in the House drew attention to the enormously increased taxation which road transport has been called upon to bear during the past two years."
  Then he made a speech about taxable capacity, saying:
  "The very fact that there is not that reserve of taxable capacity is proved by this tax, because the Chancellor has had to go to a tax which is, in my submission, directly inflationary in order to get the necessary amount of money."—[OFFICIAL REPORT, 8th May, 1951; Vol. 487, c. 1890–1.]
  This was nothing new to the Foreign Secretary. The previous year he had made an important speech about the tax during the Committee stage of the Finance Bill. He referred to the effects both on bus fares and local rates, and he said:
  "That is yet another example of the way in which this new impost is going to increase the burden of the cost of living upon ordinary people in this country. It is a thoroughly had tax. … I do not think there could be a better case for not having this increase in taxation."—[OFFICIAL REPORT, 14th June, 1950; Vol. 476, c. 253.]
  The President of the Board of Trade, of course, went into hysterics about it, making one of his long passionate speeches, in which he said:
  "Every housewife, as she goes shopping and has to pay the extra 1d. in her bus fare knows the effect of this kind of taxation. I agree

  111
  with my hon. Friend who said that no tax could have been better designed to force up prices and to increase export costs."
  Is it only since the right hon. Gentleman became President of the Board of Trade that he has ceased to be interested in export costs? He went on:
  "We believe that the whole of this tax is unnecessary, is vicious, and is calculated to do all the things which the Chancellor, if he was a wise one, would not at present be attempting to do."—[OFFICIAL REPORT, 14th June, 1950; Vol. 476, c. 267–9.]
  The Lord Privy Seal spoke on this matter. I do not want to leave anybody out. In the 1950 Budget debate, he said:
  "It is not a case of fair shares for all, but a case of those with sufficient money who can afford the petrol being able to buy it."—[OFFICIAL REPORT, 19th April, 1950; Vol. 474, c. 153.]
  We are sorry not to see the Leader of the House here today; he never is here during finance debates these days, for reasons which I cannot understand.
  There were many other right hon. Gentlemen opposite who spoke in a similar way. The Secretary of State for Air was one. The Minister of Fuel and Power was another; he intervened on this subject several times. He was a new Member of the House then. We heard from the Minister of National Insurance and from Parliamentary Secretaries galore. I will not weary the House or embarrass hon. and right hon. Gentlemen by quoting any of their words, except that I should, I think, refer to the speech of the Postmaster-General. The Postmaster-General has just been entrusted with the task of explaining Government policy to those who do not yet understand it, and these words of his might be helpful to him in his new task. During the Committee stage of the Finance Bill, 1950, he said:
  "I will not repeat the argument, or expression of astonishment, that at a time when this country needs above all lower costs, at a time when this country is above all bothered by a rising cost of living"—
  this is six years ago—
  "there should have been selected for this particular piece of money raising an instrument which increases the cost of production and increases the cost of living to a much greater extent than right hon. Gentlemen on the other side of the Committee are prepared to admit."
  Then, after a bitter attack on its implications for medical practitioners, especially in rural areas, he concluded:
  112
  "It still remains what it was at the beginning, a tax on the industrial and commercial costs of this country. It is a tax which will result in an increase in the cost of living."—[OFFICIAL REPORT, 14th June, 1950; Vol. 476, c. 277–80.]
  Those are the views of the Chancellor's right hon. Friends. [An HON. MEMBER: "How much was it then?"] Petrol was 3s. a gallon then, and now it has gone up above 6s.
  Did the Chancellor know about all these statements? Was he not moved by all this eloquence of which I have been reminding the House? [An HON. MEMBER: "He is doubling the standard of living."] I want to be fair to the Chancellor, as I always am. We all know he is a conscientious Chancellor, and I am sure he must have been deeply moved when he knew of all these expressions of view. Or was what really happened—as I suspect it was—that when he raised the matter with his colleagues, they said to him, "Do not be naive, Harold. We said all these things when we were in opposition. We had to say them, or we should not have got in; we should not have got in if we had told them a tenth part of what we were going to do." The Chancellor was, no doubt, satisfied with that explanation. It is interesting to note that one cannot find any record of the right hon. Gentleman himself ever having made any speeches on those lines, and he was obviously embarrassed by his colleagues.
  As all these right hon. Gentleman say, and as hon. Members in all parts of the House have said again today, this Bill puts up prices all round. We have heard about bus fares and road haulage charges, but I want to stress what was said by a number of hon. Members opposite about the cumulative effect of these things. A trader finds that his costs have been raised by one-fifth of a penny, and so, of course, he puts up the price by 1d. if he can.
  As the hon. Member for Cheadle (Mr. Shepherd) quite rightly said, the effect is very largely psychological; the whole psychology is now in terms of price increases. The Chancellor's plateau is dead—or whatever is the right geological expression to describe the end of a plateau. [An HON. MEMBER: "Barren."] Everyone now is going to put prices up whether his costs are raised by the Bill or not. I remember a time in 1950, after Korea, when there

  113
  was a similar psychological atmosphere for putting up prices. The London hairdressers came to the Board of Trade—there was price control in those days—to say that they had to put up the price of haircuts because of Korea. Of course, we told them we could not agree to that.
  Every body now is thinking of putting up prices because of this increase. Bus fares have been referred to. I think the Chancellor is right; many local authorities will show restraint, because they have committees and constituents to think about; but private companies will not show the same restraint in the matter of bus fares.
  This price increase which has fallen on petrol is not confined to the tax increase. As my hon. Friends have reminded the House, the companies have put up the price by 3½d. a gallon. I remember suggesting to the Chancellor, in a speech a fortnight before Suez, that he should put price control on petrol and oil products; and we suggested it to him last Tuesday again. These oil companies are getting it both ways. When all is well, and the Canal is open, the companies make record profits. For instance, Royal Dutch Shell has just announced its figures, and for the first three-quarters of the year its net income, after tax, has gone up by £19 million, from £113 million to £132 million. The company increased its interim dividend the last week, the day after the Chancellor made his announcement, from £10 million to £12·2 million.
  It may well be said that good times justify high profits, but what the oil companies are doing is to get it both ways. When things go badly, instead of bearing their losses, they use their monopoly position to push up prices still further so as to protect their profit standard. I suggest most seriously to the Minister of Fuel and Power that he has a responsibility to the consumer in this respect. It is not good enough for him to come to the House and act as though he is Parliamentary Secretary to the big oil companies. He is not; he is the Minister of Fuel and Power, and he really should introduce an adequate system of price control over the oil companies.
  In a few minutes we shall be called upon to vote. As one of my hon. Friends has said, this will be the first vote which we have been called upon to make on the economic cost as opposed to the political
  114
  cost of Suez. We shall vote against the Bill on those grounds. We shall vote against it also on the ground that eyen in the situation in which the country finds itself, this is a wrong and unfair way of sharing the burden.
  It is possible—I do not know yet—that the Government may win this vote. After last week, we know something of their coercive power. There is, however, one thing that hon. Members should bear in mind. Some of them are here, I believe, because at the last Election they promised that there would be queues, rationing and restrictions if a Labour Government was elected.
  I wonder how many hon. Members opposite remember this little document with which they flooded the country, a mock ration book headed "Let's Vote Labour." Perhaps I might remind one or two hon. Members opposite, who are in doubt about how to vote, of what they said would happen if a Labour Government was returned. I quote:
  "The counting of coupons, the filling of forms, the schedules and permits, the quotas and norms, the juggling with rations, one up and two down, the spies and inspectors in country and in town. And, since we find freedom a snare and a strain, let's start with controls and restrictions again."
  It then goes into further flights of poetry.
  There is a very good line here for the Chancellor:
  "let's grovel for dollars while cursing the Yanks, and trace all our troubles to profits and banks"
  —that is, the credit squeeze. And so it goes on. I will take just one last quotation from it:
  "let's step up taxation to heights that astound, destroy Britain's credit, devalue the Pound …"
  I trust—we all trust—that while we see Britain's credit very seriously endangered by what the Government have done, the reference to devaluation will be misplaced and that the Chancellor will, at the earliest possible moment, bring forward those appropriate measures to strengthen the £ for which we have called. This Measure certainly represents raising taxation "to heights that astound"; but it is because the Bill, for all the reasons given by every hon. Member who has spoken, in all parts of the House, is singularly inappropriate for the purposes that the Chancellor has set himself, that we shall vote against the Second Reading tonight.
  7.53 p.m.
  The Financial Secretary to the Treasury (Mr. Henry Brooke): Despite all that the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) has said, this short debate has proved once again the unerring judgment of my right hon. Friend the Chancellor—[Laughter]—yes, his unerring judgment when he said that to put an additional tax on petrol would not be popular. Nothing that has been said in the debate has undermined my right hon. Friend's argument that it is right to do so.
  Hon. Members opposite have attacked these proposals as rationing by the purse, but apparently rationing by the purse was not sinful when it was done by them in 1950, when they took off rationing and imposed a higher duty as a check on consumption and put it on, not as a temporary, but as a permanent tax. It is apparently, in their view, unforgivable to commit an occasional lapse, but it is quite all right to be like the Socialists and have a bad character.
  The right hon. Gentleman committed one of those political errors when he failed to give us the end of that fascinating debate in 1950 from which he quoted. He forbore to tell us that the Labour Party of that day unanimously rejected all the arguments, which his hon. and right hon. Friends today have used, alleging that a higher duty on petrol would damage our export trade and put up prices. They all went into the Lobby in support of precisely the opposite case which they have been putting before the House today.
  In two days' time we shall be proceeding to the Committee stage of this Bill, when a number of specific points which have been raised during our Second Reading debate would, I suggest, be better debated then. For example, the hon. and gallant Member for Hull, West (Captain Hewitson) referred to a case in which, he alleged, it would cost £31,000 to claim £28,000 drawback on certain dutiable spirit used in industry. If he is to pursue that kind of case on Wednesday, I hope that before then he will give chapter and verse in support of his allegation so that it can be examined.
  My hon. Friend the Member for Scotstoun (Sir J. Hutchison) and the hon. Member for West Lothian (Mr. J. Taylor)
  116
  referred to Scottish shale oil. They talked in terms of the long-term future of the industry, but, of course, one cannot deal with the long-term future of any industry within the confines of a temporary Bill. In fact, the Scottish shale industry, by the 1s. 3d. a gallon preference which it now enjoys, is receiving in effect a subsidy of rather more than £1 million a year.
  The case that the two hon. Members were putting, from both sides of the House, to the Government was that this preference should be temporarily increased. Quite clearly, however, that would be no solution to the real future of the industry, and I remind both of them of the statement made by my right hon. Friend the Minister of Fuel and Power to the House on 26th November that the company had informed him
  "that the throughput of the industry is already at a maximum and could not be increased without large-scale reorganisation which would take several years to carry out."—[OFFICIAL REPORT, 26th November, 1956; Vol. 561, c. 14.]
  I hope I have proved my point that any temporary change in the preference would be irrelevant to the problems of the industry.
  Very little has been said by way of criticism against Clause 2 of the Bill, the Clause which provides special procedure to enable bus companies and London Transport to secure a temporary increase in their fares without going through the prolonged statutory procedure.
  Mr. David Jones: Under Clause 2, London Transport Executive is permitted to raise its fares on the London Underground, which does not use oil, for the reason that not to do so would encourage people to travel by Underground. I notice, however, that some of the bigger towns which employ trolleybuses for some of their long-distance routes are not given the same concession. I wonder why?
  Mr. Brooke: I suggest that that kind of point ought to be dealt with in Committee rather than that we should hold up the whole House, which, I know, is anxious to proceed to a further debate this evening.
  What I wanted to make clear is that the provisions of Clause 2 will not, as some hon. Members suggested, in any way cut across the normal machinery for seeking permission to increase fares. The

  117
  normal procedure of applications for revisions will continue unchanged and any increases in fares under the Bill and any additional costs due to the temporary emergency will alike be left out of account in considering applications for alterations in fares which come before the Transport Tribunal or the Traffic Commissioners.
  I listened with much interest to my hon. and learned Friend the Member for Hove (Mr. Marlowe) and to my hon. Friend the Member for Withington (Sir R. Cary) when they were speaking about the position of taxis. It is quite true that taxis are the one other type of undertaking which is restricted by Statute as to the charges it can make. My hon. and learned Friend the Member for Hove sought to make the case that although in London a temporary increase in taxi fares could be made immediately by order of the Home Secretary, the statutory procedure in the provinces, though not nearly as long as for bus fares, would still be too long in proportion to what we all hope is the temporary period of the Bill. I have drawn the attention of the Chancellor to this point and he is considering it.
  My hon. and learned Friend the Member for Hove asked, why not make an Amendment in the Bill? If we were to make a change of this kind, the Amendment moved in Committee, to be in order, would have to be preceded by a further Ways and Means Resolution. If my right hon. Friend comes to the conclusion after further examination that the case made by my hon. Friends is a substantial one, it will then be necessary for him to put a further Ways and Means Resolution on the Notice Paper.
  Mr. H. Wilson: Would the right hon. Gentleman be just a little clearer about this, because I think the whole House wants to know? This was a fair point which was raised by hon. Members. I am sure all hon. Members will want to facilitate any possible Amendment to put this matter right, and even without making too much of the fact that the Government should have thought about this matter in the first place, before bringing in the Bill. It really is not good enough—is it?—to tell the House that the Chancellor is going to think about this. We understand that he is going to Paris tomorrow. We are to have the
  118
  Committee on the Bill on Wednesday. Will the right hon. Gentleman say a little about the timetable, because I understand that we should need to have two different stages of any additional Ways and Means Resolution, the Committee of Ways and Means and the Report of the Committee of Ways and Means, before we could make use in Committee on the Bill of such a further Resolution?
  Mr. Brooke: I did not want to be in the least vague. At the same time I wanted to give my right hon. Friend a little time to consider a matter which has been raised during the debate tonight. I certainly give this undertaking, that if my right hon. Friend decides that he should recommend to the House a change in the Bill to meet the point, as the right hon. Gentleman the Member for Huyton has said, the legitimate point raised by several hon. Members, then he will put on the Paper tonight a further Ways and Means Resolution, which would need to be considered in Committee of Ways and Means tomorrow and reported to the House so that any Amendment put down to the Bill would be in order when the Bill is in Committee.
  Mr. Marlowe: As the Preamble enables an increase in certain fares to be made, would not an Amendment to allow an alteration in the law relating to provincial taxi fares be in order as things are?
  Mr. Brooke: No. There are certain technicalities about these financial Bills, as my hon. and learned Friend will discover if he studies the matter, and one cannot move into a Bill like this anything which is not specifically covered by the Ways and Means Resolution.
  Mr. H. Wilson rose—
  Hon. Members: Oh.
  Mr. Wilson: I am sorry to interrupt again, but I really must. The House is being asked to agree to something rather unusual for the second week in succession. It is extraordinary that the Government did not realise that there are taxi-cabs outside of London. Would the right hon. Gentleman clarify a small point of procedure which may turn out to be difficult? Is it not a fact that the Report of the Committee of Ways and Means on the passing of a Resolution must take place

  119
  on a day other than the day on which the Committee of Ways and Means passes a Resolution? Will not a further Ways and Means Resolution have to be reported before an Amendment can be made to the Bill in Committee on the Bill? Are we not to have the Committee on the Bill on Wednesday? What will be the timetable, assuming the Chancellor agrees to the concession?
  Mr. Brooke: I think the timetable would be this. The Ways and Means Resolution would be tabled tonight and appear on the Paper tomorrow, Tuesday. It would be debated in Committee of Ways and Means on Tuesday night at whatever time might be arranged through the usual channels, and then the Report of that Ways and Means Resolution would need to be taken first thing on Wednesday, if Amendments to the Bill were to be in order in Committee on the Bill later on Wednesday.
  Captain J. A. L. Duncan: The law in Scotland may be different from the law in England. The right hon. Gentleman the Member for Huyton (Mr. H. Wilson) referred to the provinces, but he left out any mention of Scotland. I hope my right hon. Friend is not overlooking the Scottish law.
  Mr. Brooke: I was seized of that point.
  Mr. Marlowe: If the Report of the Ways and Means Resolution is not made until before the business of the Committee on the Bill is taken on Wednesday, then how, suppose the position is not satisfactory, am I to be in a position to put down an Amendment in Committee on the Bill?
  Mr. Wilson: The House is in great difficulty about this, through no fault of ours. Before the right hon. Gentleman answers that question, would he consider this? Would the Treasury Bench join with representatives of the Opposition Front Bench in making representations to the Chair that, in the very special circumstances arising from this unusual Ways and Means Resolution, manuscript Amendments bearing on this would be accepted by the Chair? I think that if both sides of the House were to make such representations to the Chair the matter would be given the fullest possible consideration by the Chair.
  Mr. Brooke: Of course, I cannot say what view the Chair would take, but if my right hon. Friend decides to put down a Ways and Means Resolution tonight he will table at the same time any Amendment to the Bill which commends itself to him to give effect to the case which has been put by my hon. Friends. That will be on the Paper, and it will be possible for other hon. Members to put down their own Amendments, or Amendments to my right hon. Friend's Amendment. I would assure my hon. and learned Friend the Member for Hove that when the Bill has had its Second Reading he can put down any Amendments he likes. The Ways and Means Resolution will not debar him from putting down Amendments. It will only determine whether or not they are in order.
  A number of hon. Members have asked why the Chancellor should have selected petrol to tax. Many have asked that, but hardly any have suggested any alternative. The hon. Member for Sowerby (Mr. Houghton) agreed with my right hon. Friend that it would be impracticable to increase Income Tax in the middle of the year. The right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) threw out the suggestion that the Government ought to put an additional tax on tobacco. Does he mean that, or does he not? We put an extra tax on tobacco in the Budget. It did not commend itself warmly to right hon. Gentlemen opposite. Now they are suggesting that the tax should be further increased.
  Mr. Gordon Walker: I did not suggest such a thing. I spoke of having more Commonwealth and less American tobacco.
  Mr. Brooke: The record will show.
  Let me quickly assure my hon. Friend the Member for Dover (Mr. Arbuthnot) that there is no tax imposed by this Bill on boiler fuel. It is on petrol, on fuel oil for use for motor vehicles, and on other oils which are already subject to tax.
  What are the reasons for this tax, I have been asked? The reasons are, as my right hon. Friend said last Tuesday, first of all discouragement of the use of petrol within rationing. The hon. Member for East Ham, South (Mr. Oram) said that the tax was an absurdity because those who used most oil would pay most. What

  121
  would be the use of a tax which was imposed heavily on the people who did not pay any tax at all? Of course, it is a tax which is designed to secure that everybody, whether private user or business user, who buys and uses petrol or dutiable oils shall use them with the utmost care and economy, and there is considerable scope, even within the ration, for economical use.
  My right hon. Friend used a phrase last week—he is famous for the architectural sparkle of his language—in which he said it was
  "wise to buttress this precious liquid."—[OFFICIAL REPORT, 4th December, 1956; Vol. 561, c 1061.]
  The mixed metaphor could well have been used by the borough engineer who received a letter one day which started in this way:
  "Dear Sir, I am writing to you because I am told that the sewage goes through your office."
  My right hon. Friend's vivid language has matched the cogency of his argument, and the fact that his phrase has been repeatedly quoted proves that his argument has gone home.
  The second reason for increasing the tax is that otherwise the Chancellor would lose £30 million of revenue this year, and I cannot join with my hon. Friend the Member for Ilford, South (Mr. Cooper) when he says that that would be quite an irrelevancy. From the day when Colonel Nasser seized the Canal this country was poorer. Its oil was at risk. We know from the figures my right hon. Friend gave that, over the year, from midsummer, 1956, to mid-summer, 1957, instead of securing a substantial surplus on the balance of payments for which we had been working, we shall have, through our need for oil and other causes, to work hard to secure a balance. We shall break even. As my right hon. Friend said, on the most pessimistic estimate that he had made, he was satisfied that we would break even, but what we need is a substantial surplus, and we must find means of making our own contribution to the necessary reduction in home consumption which is essential if we are to expand our exports.
  This is a form of compulsory saving. Hon. Members on both sides of the House have argued whether a tax like this is inflationary. They have argued whether
  122
  the situation we are in, with this shortage of oil, is inflationary or deflationary. I doubt whether anybody would care to give a firm and unequivocal answer to that today lest history should prove him wrong. What is true, without any question, is that in these difficult days we should follow the path of discretion. We ought not to take risks.
  Mr. Percy Shurmer: Did the right hon. Gentleman say that we shall break even or shall break "Eden"?
  Mr. Brooke: The hon. Member is very clever, but I am anxious to enable the House to come to a conclusion on this matter.
  I thought that the hon. Member for Sowerby cast some doubt on whether the maintenance of economic strictness on our part had any effect on sterling. I assure him and the House that it has. My right hon. Friend the Chancellor said in the course of his economic statement, when he described the measures which he was taking to strengthen the reserves, that we must not do it all on tick. It is to give evidence to the country and to the world that we are prepared to restrict and restrain and tax ourselves and not expect to get out of all our difficulties by borrowing that my right hon. Friend is asking the House to impose this unpopular tax.
  Mr. Sydney Silverman: I do not pretend to be an expert on this matter but, like everybody else, I try to follow the argument. As the right hon. Gentleman was saying that the purpose of the tax is to persuade or to encourage people to use even less petrol than the miserable ration allowed to them, would it not be much simpler to reduce the ration?
  Mr. Brooke: I dealt with that a little time ago. The hon. Member is a little behind hand. I have said that we must not be tempted to increase the levels of consumption at the expense of the surplus which we need on our balance of payments. This tax is a temporary tax and there is no ground whatever for founding on a temporary tax permanent wage increases or permanent increases in prices.
  Repeatedly my right hon. Friend has described in terms the nature of this temporary tax. He said at the outset that he regarded the new petrol duty as a temporary measure during the present oil

  123
  shortage. He has repeated that today. Hon. Members have suggested that we ought to write into the Bill words making sure that the matter would come before the House again within a reasonable period, but I must remind the House that that will happen in any case. [HON. MEMBERS: "No."] There must be a Budget early next year. In four months the House will be considering the next Budget, and my right hon. Friend told the House, in moving the Second Reading of the Bill today, that he intended to review this temporary tax in the course of his Budget planning. Moreover, whatever happens, within six months' time the House will be examining in Committee the terms of a new Finance Bill, and I can see no power that could prevent any hon. Member from putting forward an Amendment for consideration on the Finance Bill to call in question the continuance of the tax.
  Mr. H. Wilson: The right hon. Gentleman should not mislead the House in this way. Does he not remember twice in the House in 1955 defending a Budget and a Finance Bill in April and in October of that year and that on neither of those Finance Bills would it have been in order to move any Amendment whatsoever relating to this subject because of a Ways and Means Resolution introduced by the Government? Will the right hon. Gentleman therefore give an assurance that a Resolution in the next Budget will enable the House to move Amendments of this kind if it considers that necessary?
  Mr. Brooke: What I can give the right hon. Gentleman is an assurance that there will not be a General Election in 1957 and, therefore, there will be no need to have a curtailed Finance Bill, as there was in 1955.
  Some hon. Members urge that there should be written into the Bill a provision
  that the tax will come to an end the day that rationing ends. I think that, on reflection, most hon. Members will realise that it would not be possible to guarantee in advance that the Bill could be just cut off like that. Moreover, oil shortage started before the new tax started. But what my right hon. Friend has said four times now to the House is that this temporary tax is connected with the oil shortage and that when the oil shortage ends it will come off.
  Mr. R. R. Stokes: When the tax comes off, will these iniquitous and infamous charges of 3½d. on the wholesale and 1½d. on the retail price come off too?
  Mr. Brooke: Those are matters which perhaps might be open to debate in the debate to which I am trying to lead the House by ending a speech which would have ended earlier but for the number of times that I have given way to hon. Members opposite.
  The right hon. Member for Smethwich used a curious phrase about honourable taxes and he said that this was a dishonourable one. I will not venture as Financial Secretary to draw this delicate distinction of honour among—[HON. MEMBERS: "Thieves."]—these legitimated thefts. We all know our friends of the Inland Revenue and the Customs and Excise. We know the job that they have to do in collecting these taxes, and we sympathise with them. It is not because this tax will be popular that I ask the House to give a Second Reading to the Bill, but because in my view and that of the Government it is right to give the country further evidence of our resolve to keep consumption under restraint and preserve the value of the £.
  Question put, That the Bill be now read a Second time.
  The House divided: Ayes 313, Noes 258.

  Division No. 22.]

  AYES

  [8.20 p.m.

  Agnew, Cmdr. P. G.

  Baldwin, A. E.

  Bidgood, J. C.

  Aitken, W. T.

  Balniel, Lord

  Biggs-Davison, J. A.

  Allan, R. A. (Paddington, S.)

  Barber, Anthony

  Birch, Rt. Hon. Nigel

  Alport, C. J. M.

  Barlow, Sir John

  Bishop, F. P.

  Amery, Julian (Preston, N.)

  Barter, John

  Black C. W.

  Anstruther-Gray, Major Sir William

  Baxter, Sir Beverley

  Body, R. F.

  Arbuthnot, John

  Beamish, Maj. Tufton

  Boothby, Sir Robert

  Armstrong, C. W.

  Bell, Philip (Bolton, E.)

  Bossom, Sir Alfred

  Ashton, H.

  Bell, Ronald (Bucks, S.)

  Bowen, E. R. (Cardigan)

  Astor, Hon. J. J.

  Bennett, F. M. (Torquay)

  Boyd-Carpenter, Rt. Hon. J. A.

  Atkins, H. E.

  Bennett, Dr. Reginald

  Boyle, Sir Edward

  Baldock, Lt.-Cmdr. J. M.

  Bevins, J. R. (Toxteth)

  Braithwaite, Sir Albert (Harrow, W.)

  Bromley-Davenport, Lt.-Col. W. H.

  Heath, Rt. Hon. E. R. G.

  Maudling, Rt. Hon. R.

  Brooke, Rt. Hon. Henry.

  Hesketh, R. F.

  Mawby, R. L.

  Browne, J. Nixon (Craigton)

  Hicks-Beach, Maj. W. W.

  Maydon, Lt.-Comdr. S. L. C.

  Bryan, P.

  Hill, Rt. Hon. Charles (Luton)

  Medlicott, Sir Frank

  Buchan-Hepburn, Rt. Hon. P. G. T.

  Hill, Mrs. E. (Wythenshawe)

  Milligan, Rt. Hon. W. R.

  Bullus, Wing Commander E. E.

  Hill, John (S. Norfolk)

  Molson, Rt. Hon. Hugh

  Burden, F. F. A.

  Hinchingbrooke, Viscount

  Monckton, Rt. Hon. Sir Walter

  Butcher, Sir Herbert

  Hirst, Geoffrey

  Moore, Sir Thomas

  Butler, Rt. Hr. R. A. (Saffron Walden)

  Holland-Martin, C J.

  Morrison, John (Salisbury)

  Campbell, Sir David

  Holt, A. F.

  Mott-Radclyffe, C. E.

  Carr, Robert

  Hope, Lord John

  Nabarro, G. D. N.

  Cary, Sir Robert

  Hornby, R. P.

  Nairn, D. L. S.

  Channon, H.

  Hornsby-Smith, Miss M. P.

  Neave, Airey

  Chichester-Clark, R.

  Horobin, Sir Ian

  Nicholls, Harmar

  Cole, Norman

  Horsbrugh, Rt. Hon. Dame Florence

  Nicholson, Godfrey (Farnham)

  Conant, Maj Sir Roger

  Howard, Gerald (Cambridgeshire)

  Nicolson, N. (B'n'm'th, E. & Chr'ch)

  Cooper, A, E.

  Howard, Hon. Greville (St. Ives)

  Noble, Comdr. A. H. P.

  Cooper-Key, E. M.

  Howard, John (Test)

  Nugent, G. R. H.

  Cordeaux, Lt.-Col. J. K.

  Hughes Hallett, Vice-Admiral J.

  O'Neill, Hn. Phelim (Co. Antrim, N.)

  Corfield, Capt. F. V.

  Hughes-Young, M. H. C.

  Ormsby-Gore, Hon. W. D.

  Craddock, Beresford (Spelthorne)

  Hulbert, Sir Norman

  Orr, Capt. L. P. S.

  Crouch, R. F.

  Hurd, A. R.

  Orr-Ewing, Charles Ian (Hendon, N.)

  Crowder, Petre (Ruislip—Northwood)

  Hutchison, Sir Ian Clark (E'b'gh. W.)

  Orr-Ewing, Sir Ian (Weston-S-Mare)

  Cunningham, Knox

  Hutchison, Sir James (Scotstoun)

  Osborne, C.

  Dance, J. C. G.

  Hyde, Montgomery

  Page, R. G.

  Davidson, Viscountess

  Hylton-Foster, Sir H. B. H.

  Pannell, N. A. (Kirkdale)

  D'Avigdor-Goldsmid, Sir Henry

  Iremonger, T. L.

  Partridge, E.

  Deedes, W. F.

  Irvine, Bryant Godman (Rye)

  Peyton, J. W. W.

  Digby, Simon Wingfield

  Jenkins, Robert (Dulwich)

  Pilkington, Capt. R. A.

  Dodds-Parker, A. D.

  Jennings, J. C. (Burton)

  Pitman, I. J.

  Donaldson, Cmdr. C. E. McA.

  Jennings, Sir Roland (Hallam)

  Pitt, Miss E. M.

  Doughty, C. J. A.

  Johnson, Dr. Donald (Carlisle)

  Pott, H. P.

  Drayson, G. B.

  Johnson, Eric (Blackley)

  Powell, J. Enoch

  du Cann, E. D. L.

  Johnson, Howard (Kemptown)

  Price, David (Eastleigh)

  Dugdale, Rt. Hn. Sir T. (Richmond)

  Jones, R. Hon. Aubrey (Hall Green)

  Price, Henry (Lewisham, W.)

  Duncan, Capt. J. A. L.

  Joseph, Sir Keith

  Prior-Palmer, Brig. O. L.

  Duthie, W. S.

  Joynson-Hicks, Hon. Sir Lancelot

  Profumo, J. D.

  Eccles, Rt. Hon. Sir David

  Kaberry, D.

  Raikes, Sir Victor

  Eden, J. B. (Bournemouth, West)

  Keegan, D.

  Ramsden, J. E.

  Elliot, Rt. Hon. W. E.

  Kerby, Capt. H. B.

  Rawlinson, Peter

  Emmet, Hon. Mrs. Evelyn

  Kershaw, J. A.

  Redmayne, M.

  Errington, Sir Eric

  Kimball, M.

  Rees-Davies, W. R.

  Erroll, F. J.

  Kirk, P. M.

  Remnant, Hon. P.

  Farey-Jones, F. W.

  Lagden, G. W.

  Renton, D. L. M.

  Fell, A.

  Lambert, Hon. G.

  Ridsdale, J. E.

  Finlay, Graeme

  Lambton, Viscount

  Rippon, A. G. F.

  Fisher, Nigel

  Lancaster, Col. C. G.

  Robinson, Sir Roland (Blackpool, S.)

  Fletcher-Cooke, C.

  Langford-Holt, J. A.

  Robson-Brown, W.

  Fort, R.

  Leavey, J. A.

  Rodgers, John (Sevenoaks)

  Foster, John

  Leburn, W. G.

  Roper, Sir Harold

  Fraser, Hon. Hugh (Stone)

  Legge-Bourke, Maj. E. A. H.

  Ropner, Col. Sir Leonard

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Legh, Hon. Peter (Petersfield)

  Russell, R. S.

  Freeth, D. K.

  Lennox-Boyd, R. Hon. A. T.

  Sandys, Rt. Hon. D.

  Galbraith, Hon. T. G. D.

  Schofield, Lt.-Col. W.

  Gammans, Sir David

  Lindsay, Hon. James (Devon, N.)

  Scott-Miller, Cmdr. R.

  Garner-Evans, E. H.

  Lindsay, Martin (Solihull)

  Sharpies, R. C.

  George, J. C. (Pollok)

  Linstead, Sir H. N.

  Shepherd, William

  Gibson-Watt, D.

  Llewellyn, D. T.

  Simon, J. E. S. (Middlesbrough, W.)

  Glover, D.

  Lloyd, Rt. Hon. G. (Sutton Coldfield)

  Smithers, Peter (Winchester)

  Godber, J. B.

  Lloyd, Maj. Sir Guy (Renfrew, E.)

  Smyth, Brig. Sir John (Norwood)

  Gomme-Duncan, Col. Sir Alan

  Lloyd-George, Maj. Rt. Hon. G.

  Soames, Capt. C.

  Gough, C. F. H.

  Longden, Gilbert

  Spearman, Sir Alexander

  Gower, H. R.

  Low, Rt. Hon. A. R. W.

  Speir, R. M.

  Graham, Sir Fergus

  Lucas, Sir jocelyn (Portsmouth, S.)

  Spence, H. R. (Aberdeen, W.)

  Grant, W. (Woodside)

  Lucas, P. B. (Brentford & Chiswick)

  Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

  Grant-Ferris, Wg. Cdr. R.(Nantwich)

  Lucas-Tooth, Sir Hugh

  Stanley, Capt. Hon. Richard

  Green, A.

  McAdden, S. J.

  Stevens, Geoffrey

  Gresham Cooke, R.

  McCallum, Major Sir Duncan

  Steward, Sir William (Woolwich, W.)

  Grimond, J.

  Macdonald, Sir Peter

  Stewart, Henderson (Fife, E.)

  Grimston, Hon. John (St. Albans)

  Mackeson, Brig. Sir Harry

  Stoddart-Scott, Col. M.

  Grimston, Sir Robert (Westbury)

  Mackie, J. H. (Galloway)

  Storey, S.

  Grosvenor, Lt.-Col. R. G.

  McLaughlin, Mrs. P.

  Stuart, Rt. Hon. James (Moray)

  Gurden, Harold

  Maclean, Fitzroy (Lancaster)

  Studholme, Sir Henry

  Hall, John (Wycombe)

  McLean, Nell (Inverness)

  Sumner, W. D. M. (Orpington)

  Hare, Rt. Hon. J. H.

  Macleod, Rt. Hn. Iain (Enfield, W.)

  Taylor, Sir Charles (Eastbourne)

  Harris, Frederic (Croydon, N.W.)

  MacLeod, John (Ross & Cromarty)

  Taylor, William (Bradford, N.)

  Harris, Reader (Heston)

  Macmillan,Rt.Hn.Harold(Bromley)

  Teeling, W.

  Harrison A. B. C. (Maldon)

  Macpherson, Niall (Dumfries)

  Temple, J. M.

  Harrison, Col. J. H. (Eye)

  Maddan, Martin

  Thomas, Leslie (Canterbury)

  Harvey, Air Cdre. A. V. (Macclesfd)

  Maitland, Cdr. J. F. W. (Horncastle)

  Thomas, P. J. M. (Conway)

  Harvey, Ian (Harrow, E.)

  Maltland, Hon. Patrick (Lanark)

  Thompson, Kenneth (Walton)

  Harvey, John (Walthamstow, E.)

  Marlowe, A. A. H.

  Thompson, Lt.-Cdr. R. (Croydon, S.)

  Harvie-Watt, Sir George

  Marples, A. E.

  Thorneycroft, Rt. Hon. P.

  Hay, John

  Marshall, Douglas

  Thornton-Kemsley, C. N.

  Heald, Rt. Hon. Sir Lionel

  Maude, Angus

  Tiley, A. (Bradford, W.)

  126

  127

  Tilney, John (Wavertree)

  Wakefield, Sir Wavell (St. M'lebone)

  Williams, Paul (Sunderland, S.)

  Turner, H. F. L.

  Walker-Smith, D. C.

  Williams, R. Dudley (Exeter)

  Turton, Rt. Hon. R. H.

  Wall, Major Patrick

  Wilson, Geoffrey (Truro)

  Vane, W. M. F.

  Ward, Hon. George (Worcester)

  Wood, Hon. R.

  Vaughan-Morgan, J. K.

  Ward, Dame Irene (Tynemouth)

  Woollam, John Victor

  Vickers, Miss J. H.

  Waterhouse, Capt. Rt. Hon. C.

  Vosper, D. F.

  Watkinson, Rt. Hon. Harold

  TELLERS FOR THE AYES:

  Wade, O. W.

  Webbe, Sir H.

  Mr. Oakshott and Mr. Wills.

  Wakefield, Edward (Derbyshire, W.)

  Whitelaw, W.S.I. (Penrith & Border)

  NOES

  Ainsley, J. W.

  Gaitskell, Rt. Hon. H. T. N.

  Marquand, Rt. Hon. H. A.

  Albu, A. H.

  Gibson, C. W.

  Mason, Roy

  Allaun, Frank (Salford, E.)

  Gooch, E. G.

  Mayhew, C. P.

  Allen, Arthur (Bosworth)

  Gordon Walker, Rt. Hon. P. C.

  Mellish, R. J.

  Allen, Scholefield (Crewe)

  Greenwood, Anthony

  Messer, Sir F.

  Anderson, Frank

  Grenfell, Rt. Hon. D. R.

  Mikardo, Ian

  Awbery, S. S.

  Grey, C. F.

  Mitchison, G. R.

  Bacon, Miss Alice

  Griffiths, David (Rother Valley)

  Monslow, W.

  Baird, J.

  Griffiths, Rt. Hon. James (Llanelly)

  Moody, A. S.

  Balfour, A.

  Griffiths, William (Exchange)

  Morris, Percy (Swansea, W.)

  Bellenger, Rt. Hon. F. J.

  Hale, Leslie

  Mort, D. L.

  Bence, C. R. (Dunbartonshire, E.)

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Moss, R.

  Benn, Hn. Wedgwood (Bristol, S. E.)

  Hamilton, W. W.

  Moyle, A.

  Benson, G.

  Hannan, W.

  Mulley, F. W.

  Beswick, F.

  Harrison, J. (Nottingham, N.)

  Neal, Harold (Bolsover)

  Bevan, Rt. Hon. A. (Ebbw Vale)

  Hastings, S.

  Noel-Baker, Rt. Hon. P. (Derby, S.)

  Blackburn, F.

  Hayman, F. H.

  O'Brien, Sir Thomas

  Boardman, H.

  Healey, Denis

  Oliver, G. H.

  Bottomley, Rt. Hon. A. G.

  Herbison, Miss M.

  Oram, A. E.

  Bowden, H. W. (Leicester, S. W.)

  Hewitson, Capt. M.

  Orbach, M.

  Bowles, F. G.

  Hobson, C. R.

  Oswald, T.

  Boyd, T. C.

  Holman, P.

  Owen, W. J.

  Braddock, Mrs. Elizabeth

  Houghton, Douglas

  Padley, W. E.

  Brockway, A. F.

  Howell, Charles (Perry Barr)

  Paget, R. T.

  Broughton, Dr. A. D. D.

  Howell, Denis (All Saints)

  Paling, Rt. Hon. W. (Dearne Valley)

  Brown, Rt. Hon. George (Belper)

  Hubbard, T. F.

  Palmer, A. M. F.

  Brown, Thomas (Ince)

  Hughes, Cledwyn (Anglesey)

  Pannell, Charles (Leeds, W.)

  Burke, W. A.

  Hughes, Emrys (S. Ayrshire)

  Pargiter, G. A.

  Burton, Miss F. E.

  Hughes, Hector (Aberdeen, N.)

  Parker, J.

  Butler, Herbert (Hackney, C.)

  Hunter, A. E.

  Parkin, B. T.

  Butler, Mrs. Joyce (Wood Green)

  Hynd, H. (Accrington)

  Paton, John

  Callaghan, L. J.

  Hynd, J. B. (Attercliffe)

  Pearson, A.

  Carmichael, J.

  Irvine, A. J. (Edge Hill)

  Peart, T. F.

  Castle, Mrs. B. A.

  Irving, S. (Dartford)

  Pentland, N.

  Champion, A. J.

  Isaacs, Rt. Hon. G. A.

  Plummer, Sir Leslie

  Chapman, W. D.

  Jay, Rt. Hon. D. P. T.

  Price, J. T. (Westhoughton)

  Chetwynd, G. R.

  Jeger, George (Goole)

  Price, Philips (Gloucestershire, W.)

  Clunie, J.

  Jeger, Mrs. Lena (Holbn & St.Pncs, S.)

  Probert, A. R.

  Coldrick, W.

  Jenkins, Roy (Stechford)

  Proctor, W. T.

  Collick, P. H. (Birkenhead)

  Johnson, James (Rugby)

  Pryde, D. J.

  Collins, V. J. (Shorditch & Finsbury)

  Johnston, Douglas (Paisley)

  Pursey, Cmdr. H.

  Corbet, Mrs. Freda

  Jones, Rt. Hon. A.Creech (Wakefield)

  Randall, H. E.

  Cove, W. G.

  Jones, David (The Hartlepool!)

  Rankin, John

  Craddock, George (Bradford, S.)

  Jones, Elwyn (W. Ham, S.)

  Redhead, E. C.

  Cronin, J. D.

  Jones, Jack (Rotherham)

  Reeves, J.

  Cullen, Mrs. A.

  Jones, J. Idwal (Wrexham)

  Reid, William

  Daines, P.

  Jones, T. W. (Merioneth)

  Rhodes, H.

  Dalton, Rt. Hon. H.

  Kenyon, C.

  Roberts, Albert (Normanton)

  Darling, George (Hillsborough)

  Key, R. Hon. C. W.

  Roberts, Goronwy (Caernarvon)

  Davies, Ernest (Enfield, E.)

  King, Dr. H. M.

  Robinson, Kenneth (St. Panoras, N.)

  Davies, Harold (Leek)

  Lawson, G. M.

  Rogers, George (Kensington, N.)

  Davies, Stephen (Merthyr)

  Ledger, R. J.

  Ross, William

  Deer, G.

  Lee, Frederick (Newton)

  Royle, C.

  de Freitas, Geoffrey

  Lever, Harold (Cheetham)

  Short, E. W.

  Delargy, H. J.

  Lever, Leslie (Ardwick)

  Shurmer, P. L. E.

  Dodds, N. N.

  Lewis, Arthur

  Silverman, Julius (Aston)

  Donnelly, D. L.

  Lindgren, G. S.

  Silverman, Sydney (Nelson)

  Dugdale, Rt. Hn. John (W. Brmwch)

  Lipton, Lt.-Col. M.

  Simmons, C. J. (Brierley Hill)

  Dye, S.

  Logan, D. G.

  Skeffington, A. M.

  Edelman, M.

  Mabon, Dr. J. Dickson

  Slater, Mrs. H. (Stoke, N.)

  Edwards, Rt. Hon. John (Brighouse)

  MacColl, J. E.

  Slater, J. (Sedgefield)

  Edwards, Rt. Hon. Ness (Caerphilly)

  McGhee, H. G.

  Smith, Ellis (Stoke, S.)

  Edwards, Robert (Bilston)

  McInnes, J.

  Snow, J. W.

  Edwards, W. J. (Stepney)

  McKay, John (Wallsend)

  Sorensen, R. W.

  Evans, Albert (Islington, S.W.)

  McLeavy, Frank

  Soskice, Rt. Hon. Sir Frank

  Evans, Edward (Lowestoft)

  MacMillan, M. K. (Western Isles)

  Sparks, J. A.

  Fernyhough, E.

  MacPherson, Malcolm (Stirling)

  Steele, T.

  Fienburgh, W.

  Mahon, Simon

  Stewart, Michael (Fulham)

  Finch, H. J.

  Mainwaring, W. H.

  Stokes, Rt. Hon. R. R. (Ipswich)

  Fletcher, Eric

  Mallalieu, E. L. (Brigg)

  Stones, W. (Consett)

  Forman, J. C.

  Mallalieu, J. P. W. (Huddersfd, E.)

  Strachey, Rt. Hon. J.

  Fraser, Thomas (Hamilton)

  Mann, Mrs. Jean

  Strauss, Rt. Hon. George (Vauxhall)

  128

  129

  Stross, Dr. Barnett (Stoke-on-Trent, C).

  Warbey, W. N.

  Williams, Ronald (Wigan)

  Summerskill, Rt. Hon. E.

  Watkins, T. E.

  Williams, Rt. Hon. T. (Don Valley)

  Swingler, S. T.

  Weitzman, D.

  Williams, W. R. (Openshaw)

  Sylvester, G. O.

  Wells, Percy (Faversham)

  Williams, W. T. (Barons Court)

  Taylor, Bernard (Mansfield)

  Wells, William (Walsall, N.)

  Willis, Eustace (Edinburgh, E.)

  Taylor, John (West Lothian)

  West, D. G.

  Wilson, Rt. Hon. Harold (Huyton)

  Thomas, George (Cardiff)

  Wheeldon, W. E.

  Winterbottom, Richard

  Thomas, lorwerth (Rhondda, W.)

  White, Mrs. Eirene (E. Flint)

  Woodburn, Rt. Hon. A.

  Thomson, George (Dundee, E.)

  White, Henry (Derbyshire, M.E.)

  Woof, R. E.

  Thornton, E.

  Wigg, George

  Yates, V. (Ladywood)

  Timmons, J.

  Wilcock, Group Capt. C. A. B.

  Younger, Rt. Hon. K.

  Tomney, F.

  Wilkins, W. A.

  Zilliacus, K.

  Turner-Samuels, M.

  Willey, Frederick

  Usborne, H. C.

  Williams, David (Neath)

  TELLERS FOR THE NOES:

  Viant, S. P.

  Williams, Rev. Llywelyn (Ab'tillery)

  Mr. Popplewell and Mr. Holmes.

  Bill accordingly read a Second time and committed to a Committee of the whole House.
  Committee Tomorrow.

MOTOR FUEL RATIONING
8.31 p.m.
Mr. Harold Neal: I beg to move,
That an humble Address be presented to Her Majesty praying that the Motor Fuel (No. 2) Order, 1956 (S.I., 1956, No. 1840), dated 20th November, 1956, a copy of which was laid before this House on 21st November, be annulled.
During the past few weeks, the House has been provided with ample opportunity for heated controversy, from which I confess to have derived as much interest and excitement as most other hon. Members have done. However, this is not such an occasion. Petrol rationing—that is rather a loose term, as the Minister of Fuel and Power will agree, but it is perhaps the easiest one for our purpose—is an unwelcome necessity, and it is our mutual duty to ensure that while the scheme is in operation it works in the best interests of the nation.
The day when the Minister announced the Order he said that he recognised that it was the professional duty of hon. Members on this side of the House to make things appear worse than they are. We have never conceived that to be our duty, nor have we conceived it to be the duty of the Minister to make things appear better than they are. Neither side ought consciously to trifle with the facts relating to a service upon which our whole economy depends.
The Opposition's attitude towards rationing has often brought hon. Members on this side of the House into sharp conflict with hon. Members opposite. Our policy remains consistent; when any commodity is in short supply, we believe that it should be equitably distributed. It is in that spirit that we make our critical approach to the Order. I beg the Minister to accept our criticisms in the spirit in which they are made.
First, the announcement of the Order was bungled and ill-timed. The Order was laid before Parliament on 21st November, and its vital contents do not come into operation until 17th December. It did not take us long to introduce rationing in war-time, in 1939, and the Government at that time had no precedents to guide them. However, it seems that the present Government must
132
have been thinking about the rationing of petrol for a very long time. I have my own petrol ration book here, and at the top of the first page it reads:
"This book is the property of His Majesty's Government."
That wording is out-dated. Perhaps we might have an explanation of that error.
What did the Minister expect to happen between 21st November and 17th December? It is well known that there was chaos among the motoring public. It provided unscrupulous citizens with an opportunity to hoard petrol. When my hon. Friend the Member for Erith and Crayford (Mr. Dodds) questioned the Minister on this point, he seemed to be unaware of the difficulties. He must have been singularly unobservant if he never saw queues of waiting motor cars at the garages on the roadsides, and remarkably lucky if he never had the experience of calling at a garage and being refused a fill-up.
The Minister will doubtless reply to this by saying that the hoarding of petrol is an offence against the law. I entirely agree, but while it is the duty of the State to penalise citizens who do wrong, it is equally its duty to make it as difficult as possible for them to do wrong. Twenty-seven days between the issue of the Order and its coming into operation was an incredible blunder.
I freely admit that the Minister found some sections of the Press not very helpful to him during that period, but he might have taken a lesson from the Chancellor of the Exchequer—two hours after he made his statement last week the price of petrol was increased. That was much more expeditious than the Minister of Fuel and Power in the introduction of rationing. If the coupons were printed in 1950, as the use of the words "His Majesty's Government" appears to indicate, and were left over from the last rationing period, then half the task of preparing the scheme was done, and the scheme could have been started with less notice and less confusion.
I want now to turn to some of the anomalies of the four-monthly period. Will the Minister tell us how he thinks a black market will be avoided? The motoring organisations calculate that on 31st December half a million vehicles will be taken off the road and will not be licensed for the succeeding quarter. If

133
an owner does not licence his vehicle on 1st January, he is in honour bound to surrender three months' petrol coupons.
Does the Minister really believe that that will happen universally? In any case, a motorist can have a motoring spree for the whole of December and use four months' petrol coupons in one one month, if he wishes. The instructions on the coupon clearly indicate that the coupons are available during the period. What period? The first rationing period of four months. Surely the Minister ought to find a way to prevent that abuse, and I hope that he will be able to tell us, even at this stage, that he will be able to stop it.
The postbag of every hon. Member must be showing great dissatisfaction at the disproportionate sacrifices imposed on the motoring, public. What my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) calls the language of priorities seems to have a different interpretation in petrol rationing. Most of the complaints that I have received—and I have had many—relate to the generous basic allowance compared with the scanty or absent supplementary allowance.
The Minister may pride himself on the fact that his scheme has provided 200 miles of motoring per month as against 90 miles under the old rationing scheme, but that puts a very favourable emphasis on unnecessary journeys. When applying for a supplementary allowance, it is not even a justifiable argument to say that the allowance is needed to take one to one's place of employment. That is rather a pity, because in these days, when workers are accustomed to modern transport, it will create serious inconvenience.
One has only to stand outside any great industrial works to realise how many workers travel to and from their work by means of motor-propelled vehicles. Shift workers, in particular, have to go to work when public transport is not available, or is only running at hourly intervals, and they are going to be seriously inconvenienced if they cannot have petrol to enable them to travel to and from their place of work.
Has the Minister considered the serious effect which this Order will have upon production? Admittedly it may be possible for some motorists to draw upon
134
their firm's pool. But what of the motorist whose only claim to supplementary allowance is for the purpose of travelling to work? How will he fare? Is it really fair that some workers will have to use all their basic coupons to help carry on the nation's production while others can enjoy 200 miles of pleasure motoring?
Then there is the problem of heavy and long-distance haulage. An A-licence vehicle previously travelled about 800 or 1,000 miles a week. The basic ration will permit it to travel only 100 miles. With the supplementary ration added it will probably be able to travel 120 miles. I have here a long list of organisations and firms all over the country, which I have obtained from a reputable source, and which shows that in many cases firms will be able to operate at only 13 per cent. or 14 per cent. of their pre-ration strength. Even those highest in the list will be able to operate only at 33 per cent. of its pre-ration strength.
One of the significant things about the allowance made to them and to other users of petrol is that there is no machinery for appeal. It is rare in our constitution to find a case where a Minister can impose a decision either by himself or through one of his officials without there being any appeal against it. I can only sympathise with many haulage operators whose livelihoods will be taken out of their hands as a consequence of the Order, and who will not be able to appeal against it.
I am satisfied that the Order will have the effect of removing some of the anomalies of long-distance haulage. The Minister is perhaps aware that coal has been moved from the East Midlands coal fields to London and the south-western counties by road. This is a policy which should never have been begun, and which should never be restarted when rationing is ended.
Mr. Gerald Nabarro: Hear, hear. I have been saying that for five years.
Mr. Neal: With the best will in the world, there is bound to be some unemployment and short-time working among haulage workers. Any haulage worker who is unemployed or on short time as a result of the operation of the Order will not view with pleasure any

135
unnecessary motoring, whether it is undertaken by parsons, farmers or Members of Parliament. I hope that the Minister will re-examine the basic ration and change the emphasis to the supplementary ration; otherwise there will he a loud outcry against the inequitable distribution of petrol in this emergency. I should like to repeat the advice offered by my right hon. Friend the Leader of the Opposition last week. I hope that the Minister and his colleague, the Minister of Transport, will take the trade unions into consultation at every stage of this emergency. If they can carry the trade unions with them it will be far better, and in the best interests of us all when unpopular decisions have to be made.
The Order makes no provision for red petrol. Has the Minister ruled that out entirely? I know that if rationing is going to last for only a very short period there may be extreme administrative difficulties which might not make red petrol worth while, but I hope that the right hon. Gentleman has not banished it altogether from consideration if rationing is to continue after the four-monthly period. He is probably very well aware that it was one of the most effective instruments in stopping abuses in the use of petrol when it was rationed during the War.
I wish to ask the Minister whether he really believes that the present ration can be maintained. I an) not without some knowledge of this subject, and in my view—unless the Suez Canal is cleared by the end of January, and unless the Syrian Government realise the incredible folly of breaking the pipeline and stopping the oil from flowing through its territory—by the end of January we shall be in serious difficulties.
I have no desire to be guilty of spreading alarm and despondency, but I am supported in the view that I am now expressing by the remarkably revealing figures given a few days ago by the Chancellor of the Duchy of Lancaster. The plain fact is that the tanker fleet of the world was working to capacity before this emergency; and I sympathise with the Minister when he reads of people advising him and his colleagues to build more and bigger tankers—as if some
136
magic wand could be waved and the situation saved in a week or two.
Even if the "moth-ball" fleet in America is serviceable at once; even if the United States is prepared to adjust its laws to admit increased production for the export of oil; even if the Chancellor makes available dollars to buy the oil from the Western Hemisphere, does the Minister really believe that we can embark upon another rationing period at the present rate of consumption? At one of his Press conferences the right hon. Gentleman said that it might be that before the end of the four-monthly period he would have to take more drastic steps. In that case, would it not have been better to give higher priority now to the essential services?
We should like an answer to some of the points that I have made. Because we believe in fair shares, we think that this Order is ill-conceived and ill-considered, and one which will arouse a great deal of resentment in the country.
8.47 p.m.
Dr. Horace King: I beg to second the Motion.
I have very great pleasure in seconding this Motion which has been moved so wisely and temperately by my hon. Friend the Member for Bolsover (Mr. Neal). I hope to make points which have not been made so far. Obviously, the country has to pay for the failure of the Suez affair. We may disagree very bitterly about the causes of the Suez crisis and of the present need for petrol rationing, but whatever our views about the causes of this crisis, I hope the House will reach some measure of agreement about the best way of sharing the hardships which the crisis has imposed.
I think it unfortunate that the Tories are traditionally opposed to rationing, indeed it is almost a fetish among them to denounce it. Yet, if things are scarce, no reasonable man can deny that rationing is the only right method of sharing the scarce things, because then everybody gets some. The wit of man has to be exercised to see that the shares which everyone gets are fair. In the last few weeks, the days before the imposition of rationing, we have had a striking example of what it means to leave things to free, unregulated private enterprise. All those whose philosophy may be summed up in

137
the workman's expression "all right, to hell with you Jack"—[Interruption.]—the original expression may be worse than that—have gone round in the last week collecting petrol, not only to put in their cars but in cans or in secret dumps. They have benefited to the extent of 1s. to 1s. 5d. a gallon for their greed, because they bought petrol at the old price. So though we deplore the necessity for rationing, we certainly welcome the rationing of petrol.
Indeed we think that rationing came too late. It should have been imposed at once. The Government should not have allowed three weeks for the black marketeers, the hoarders, to do their worst. As a matter of fact, Britain has been saved from the worst by the really honest work of most garages which have done the Government's job, set up their own rough rationing systems and tried to deal reasonably with their regular customers and allocated a meagre dribble to those who were just passers-by. I pay tribute to the garagemen of England, many of whom I have met during the last three or four weeks, and I do not judge them by the odd black sheep.
If the Government say that they acted as soon as they realised that petrol supplies were to be cut, and that it was bound to take some weeks to get the machinery in order, then I suggest in all seriousness that they should have foreseen weeks ago that petrol would be in short supply. No Government should have gone into the Suez escapade without knowing what the Opposition was telling them in September at every street corner in England, that the first casualty in the escapade would be the Suez Canal itself.
This Order came between three and four weeks too late. It came too late because the Government have been too proud to eat all the words they have spoken about rationing in general and because somehow, they hoped, wishfully, against logic itself, that the thing would not and could not happen. When the first rationing proposals were announced, the Minister made a virtue of what I believe to be a weakness of the scheme. He said that this was different from previous rationing schemes because, unlike previous ones, there was a good basic ration, but that he would be tight on supplementaries. This seems to me all wrong when the supplementary rations
138
are the ones which will be used for purposes essential to the country's needs.
One must admit that the Minister is quite right in saying that, compared with previous schemes, the ordinary basic ration for the private motorist is a good one; but, even compared with the grim war years, the extra rations for special needs are inadequate. If we were out to restrict wasteful private motoring, there were other methods that we could have used, but one would be out of order in discussing them now. If we are battling for survival, as indeed we are, and it is the task of both sides of the House sooner or later to get over to Britain just how grave the economic fight is, then I believe that the nation's petrol ought to go to those parts of the battlefield where it is most needed for the nation's survival.
If we are to have a united Britain in this crisis, there are two guiding principles which ought to commend themselves to right-minded people. The first is that the burdens and hardships imposed by the crisis ought to be placed on the shoulders of those who can best afford to carry them, and that the poorest people should not have to carry the extra loads. I am deeply disappointed that our first debate tonight has shown that the Government have failed to realise that that is a good principle.
The second principle is that, if possible, the Government ought to do everything they can to avoid utterly destroying the livelihod of some groups of citizens by the actions that they take in rationing petrol. If the crisis means for some people merely an inconvenience, using two small cars with ration books for each instead of one luxurious large car, that is something which we cannot approve. I cannot say how shocked I was to read an advertisement in a newspaper in which a firm in the Midlands is advertising that with one new car a second-hand old car is given free, with a ration book for each.
Mr. Victor Collins: That is done even with second-hand cars.
Dr. King: Already people are seeking ways of circumventing the aim of the Government and the true interests of Britain. If it means on the one hand merely discomfort, the abandoning of a big car for two little ones, while for other

139
people it means utter hardship and ruin, the Government have failed.
If the Minister of Fuel and Power is undoing by his measures what the Minister of Labour is trying to do by his measures, that is to preserve full employment, the Government is indeed in a very shabby position. On this count, what the Government propose to do in petrol rationing will not bear examination. We already hear of short-time and unemployment in the motor car industry; they will emerge wherever petrol plays an important part in industry. It would be better if we had no private pleasure trips at all if the oil so saved can be used to keep men at work and to make more goods for export or for home consumption.
I want to apply that principle to a narrower field, to two small groups of citizens who must have bigger rations if they are to keep going. Some of us have already raised with the Minister the question of commercial travellers, whose living depends upon the number of miles they travel and the number of visits they make. Every cut journey means a cut in their business. I understand that under previous rationing schemes, and right through the war, the bona fide commercial traveller received a special commercial traveller's supplementary allowance.
The Minister, while expressing sympathy in letters to me with the general case for the commercial traveller, has so far turned down the demand by this body for a special commercial travellers' allowance. He said to me in the House and in a letter, "The travellers must expect to get their allowance from the allowance which is given to the firms which they serve." He also said—I take same hope from this—and I quote him:
"Special consideration will be given to the needs of the self-employed travellers whose livelihood would otherwise be threatened"
In both the industries of which I speak, the little man's livelihood is threatened, and he faces the danger of being wiped out. I hope that at the end of the debate, or very soon afterwards, the Minister will lot us know what exactly he has in mind for commercial travellers.
I judge any case That I will support in this House by its justice and very often by the tone of the correspondence I receive. Let me quote therefore from a
140
letter from the United Commercial Travellers' Association, in which the Southampton branch secretary says
"I do not need to emphasise to you the important function which the bona fide commercial traveller plays in the maintenance of trade and commerce, and whilst he can he relied upon to bear his burden of the restrictions necessitated by the present emergency, his very livelihood and his function surely justify some reasonable scheme of supplementary allowances, since the basic … is completely inadequate for his needs."
The commercial traveller, in short, is willing to bear his share of the burden as an ordinary member of the community, but he says, "As a British citizen I object to having to carry an extra load."
The other group is the taxi industry. I hope that Question Time today did not leave the Minister with the thought that anyone thinks that this can be solved by robbing one group of taximen in the country to benefit another group. London taximen seem to have received a reasonable petrol allocation, but I should say that the taximen of London need and can use all they are to get under the scheme. On the other hand most provincial taxi-men are faced with complete disaster. Even in the war most of the time they got something like 17 gallons a week. We were fighting Hitler then and every drop of petrol used in this country was brought over at the risk of the lives of merchant seamen. Against that 17 gallons put the 9 gallons a week which so far is what the taximan is supposed to get.
I had a meeting with my friends the Southampton taximen, employers and employees, owners and owner-drivers about ten days ago when we discussed the impact of the scheme on those men. The position is just as I stated it at Question Time today. The average allowance is 9 gallons a week. The owner-driver using two drivers, himself and one employee, builds up a unit so that a 24-hour service can be given with one car for which 50 to 60 gallons a week is needed. There are 60 owner-drivers in my town. They can earn only £7 a week under the proposed allowance. It means, of course, that the owner-driver will have to sack the second driver at once.
Out of the £7 the owner-driver has to pay £1 a week insurance, he has the cost of petrol—and we have just put that up to over 10s. on the 9 gallons—upkeep of his car, oil, capital depreciation of his car

141
and—much more important and usual—hire-purchase instalments paid weekly for his car. In many cases rationing does not mean merely the end of work for the owner-driver, but he is left with worse than nothing because, having been turned out of his living, he still has to pay £2 10s. or £3 a week in instalments on his car which he cannot afford to use.
For the owners of fleets of cars, I am assured it means the dismissal at once of more than half their men. In my town, and probably up and down the country, taxi owners and taximen have worked very well together. Owners have said to me, "How bitter, how indescribably bitter, is the task which faces me on 17th December when, in the week before Christmas, I have to dismiss a number of faithful employees." It is worse than that. Owners of fleets of taxis will not be able to run them for more than half the four-month period, and only then by dismissing more than half their men and using four months' supply for two months' running. Perhaps the Minister will understand how bitter the taxi industry feels about the hundreds of thousands of gallons which have been "salted" away in the free period before the Government made up their minds to ration.
Some measure of the problem of the taximen was shown when they told me that even if the present ration were doubled the allowance would barely keep the average taxi on the road. As I have pointed out in the House on other occasions when I have spoken on behalf of taximen, the taxi industry does not merely serve for pleasure jaunts. Britain has become taxi-minded. Taxis are used today by all kinds of people. In a town like Southampton, the taxi service is terribly important from the shipping point of view.
Mr. James Callaghan: And also in Cardiff.
Dr. King: I assure my hon. Friend that I use Southampton examples because I know them, but what I say applies to other ports and towns. Taxis are important for men called out on river work, for dredgers and pilotage at all hours of the day and night, for incoming transport to Southampton, for very precious dollar transport, for the service of tankers which are to provide the crude oil for Fawley.
142
Strange as it may seem, taxis in Southampton, and no doubt elsewhere, play an important part in the hospital service in supplement to the voluntary car service. I quote a letter from the Town Clerk of Southampton, who writes:
"The taxi proprietors are very worried about the considerable traffic which they have with hospitals. The Netley Military Hospital has no 'bus service to it and a considerable number of journeys are run there from Southampton Station. The Children's Hospital at Bursledon is not on a 'bus route. [It is some seven miles out of Southampton.] One taxi proprietor has used 8,000 gallons of petrol in the last six months in connection with direct hospital services, and this proprietor has already notified me that his contract with the local authority in respect of the conveyance of mental defectives, midwives, between 10.30 p.m. and 7.30 a.m., and the transfer of people from old people's homes, and for Blind Welfare, must terminate."
If I mention Southampton, and if I plead the case for Southampton taximen, it is because I know our taximen in Southampton very intimately, just as I know very intimately the life of the town in which I have lived for so many years. But I would urge the Minister that what I have tried to argue is also true of other ports; that other provincial towns have similar needs, and, in the countryside, with the great distances that have to be covered by taxicabs, there is, again, a special case for the little individual taximan.
I beg the Government therefore to take this question of the allocation of petrol very seriously, and not to be inhibited by any doctrinaire dislike of planning, not to mind putting a bit of Socialism into action. That is done in quite a lot of the social Ministries, and they should not mind adding a little more to it. Their duty to the nation is to sec that the nation's petrol goes where it can serve the nation best, where it can help our economy, and where it can prevent unemployment. I would particularly ask the Minister to give very sympathetic consideration to the case, which has been made to him by deputations from one end of England to the other, of the two groups of people of whom I have spoken in detail.
9.6 p.m.
Mr. J. E. B. Hill: The hon. Member for Bolsover (Mr. Neal), criticised the slow speed with which the rationing system had been brought in. Admitting that it started off with ration books left over, I imagine,

143
from the old rationing days, I must say that I have been rather impressed by the amount of work which the Minister, his Department and the general public have been able to get through in three weeks in order to mount the scheme at all. One cannot compare it with what happened in the war, and must consider the amount of work that had to be done. About 5 million ration books have, I believe, been issued by the Post Office. There are now twice the number of cars and vehicles on the road. Above all, there was no staff in being to operate the scheme.
I think that the seconder of the Motion, the hon. Member for Southampton, Itchen (Dr. King) rather exaggerated the degree of black marketeering, or petrol hoarding, that has gone on. Hoarding, collecting or pump crawling is news, but those who do it represent only an infinitesimally small proportion of petrol users.
When one reflects, there was, in mounting the scheme, really no alternative but to adopt something of the present nature. One had to start off with a particular rule-of-thumb principle, with a fairly generous basic ration, followed by a limited supplementary allowance, with a limited category of priorities.
That is rough justice. What I and, I am sure, Members on both sides of the House are concerned about for the future is that, as this emergency lasts, the hardships inseparable from any system of rough justice should be eased and smoothed away. I should, therefore, like to make a few comments on the development of the rationing scheme.
First, there is a distinction in need between different places, and a quite obvious distinction between town and country, which is not taken into account in the existing rationing rules. A scattered countryside cannot have the same alternative facilities in public transport as has a more built-up area. I have no doubt that other constituencies have troubles which may be even greater than those in my own constituency, but I should like to say that I represent 110 parishes which extend 55 miles in one direction and up to 17 miles in another. A great many of my constituents do not work in the villages in which they live, and have to travel to work. The bus
144
services are scanty. Indeed, many villages have no daily bus. There is, therefore, really no alternative but to go to work in a car or on a motor cycle. Even if people switch as much as possible to the local railway, that in itself may involve a fairly long round trip to and from the station.
There are many special cases, such as, for instance, the case of a rural district council occupying premises in an isolated position, the staff of which, it appears, cannot get to work on the existing basic allowance plus supplementary allowance, if granted. There are schools placed in a similar position. In addition to the difficulties experienced in the work of these and similar institutions, there is the problem which will confront people following professional or commercial occupations which are not at this time included in the rather limited category of priorities. I have in mind such people as architects, land agents, etc., whose need is not so urgent, perhaps, as that of veterinary surgeons, but who, in the course of time, will find their practices restricted unless they can have a rather freer range. They cannot cut down their mileage without restricting their work.
People themselves have different circumstances. Even in the countryside, it may be possible for one person to be much nearer public transport than his not-so-near neighbour. Therefore, except in the short run, reliance upon the basic allowance, however generous, with a possible supplementary allowance of 100 miles, will work inequitably, as was said by the hon. Member for Bolsover, between those who suffer mere inconvenience and those who are suffering actual loss of earnings and work.
I would ask, therefore, that some flexibility should be introduced, particularly as regards the commercial user. Here again, there are many small rural firms which depend for their whole existence on at least one member of the firm going around fairly freely over a limited radius, working as a sort of local commercial traveller, perhaps visiting villages within ten to fifteen miles of a small country town, in order to collect orders and deliver supplies. Often, the employees of such small firms, which may be making a particular product or packing it, depend for their employment on that one man's activities. It does not

145
really matter whether the work is the packing of groceries or the making of gravestones; the same principle applies.
The allocation for commercial use is 40 per cent. of the normal allowance. That places a difficult burden on country firms which have a relatively long mileage in relation to their business. One case which has been put to me—no doubt it is only one of many—is that of the country laundries. In my part of the country they were classed as essential during the war, but at the moment they are not. It is difficult for a laundry, even if it halves its collections and deliveries, to run on a 40 per cent. allowance.
All this adds up to the plea that in the New Year, the broad work of the basic issue and supplementary allowances having been dealt with, my right hon. Friend should consider making the scheme rather more flexible so that supplementary allowances may be issued for a greater amount in those cases which show—they will need to be well proved—that a disproportionate injury will follow from restriction.
1 think we all agree that the petrol shortage is imposing a burden which we want to see shared as evenly as possible. If what we hope is a temporary interruption of only a few months hurts some people or arms more than others because they are running on a very low margin, either of reserves of or working capital, or because of hire-purchase reasons or anything of that nature, I hope that if their need is proved a greater allocation will be made in the New Year.
That raises the question of where the petrol is to come from. I cannot pretend to know in detail the sources or supplies or the forecasts, but if there is to be a shortage it would be as well, as the staff builds up and these cases can be examined, to put the emphasis on the supplementary allowance rather than on the basic allocation. That, I think, would give general satisfaction all round. I agree that it cannot be done at the moment, but I believe that it could be done in the near future.
9.17 p.m.
Mr. Ellis Smith: My observations will be for the purpose of providing the Minister with an opportunity of stating more clearly how the Order will be administered and
146
to give a few concrete examples to try to bring about a clear understanding among the public, especially in the industrial areas concerning its administration.
If I understand correctly, the Minister's authority will be derived from the Defence (General) Regulations, 1939, together with the Supplies and Services (Transitional Powers) Act, 1945. I have special personal recollections of pride in the way that we intended those Regulations to be administered in 1945. Unfortunately, however, there was a retreat from that very fine stand which was taken. I would advise every right hon. and hon. Member to read the debate on that notable Friday.
During the period of rationing, I would say that in the main, considering our difficulties, there was a fair amount of satisfaction regarding the ration. I hope that even what little dissatisfaction there was on that occasion will be eliminated now. I do not want to go into the political side of all this, and this is not the occasion for doing so. My indignation as to the causes which have brought about rationing is deeper than that of most people, but we should not concentrate on that this evening. Our task tonight is to limit ourselves to the administration of the Order, with a view to achieving the clearest understanding and to obtaining an undertaking from the Minister that the Order will be administered as fairly as it is possible to administer an Order of this kind. Therefore, I should like the Minister to explain how the basic ration and the basic ration coupon are to be administered.
Already I have heard complaints about that. I have already heard complaints amongst hon. Members of this House that some hon. Members are being allowed more than others. They do not understand why that should be so. I know that it is a matter of an individual position. Some hon. Members have large Jaguars, others only small cars, and I know that allowances must be made accordingly, but I beg the Minister not to carry that sort of thing too far here or elsewhere. The same argument applies to the supplementary allowances, and I hope the Minister will make some observations about those.
I do not want to make too much of this, but I am very uneasy about the Press report tonight about the Brighton

147
case, because that kind of thing undermines the confidence of the people, more especially when prominent people are associated with it. I know that this is not the Minister's responsibility, that it is a case of our playing the game with one another, but it is not a good thing that cases should occur like the one reported in tonight's Press.
More and more ordinary workers are travelling to their employment in cars, and many a man carries with him two or three of his colleagues. In my view, those who do that should receive special consideration. I have already had my attention drawn to a personal case, which I have sent to the Ministry. I am afraid I have made a slip, because I have sent it to the Parliamentary Secretary to the Ministry of Fuel and Power and it should have gone to the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation. It is the case of a man, who lives on the fringe of my city, at Meir, whose sister has rheumatoid arthritis. Her's is a serious case. He applied to Birmingham. He was very disappointed with the reply he received and so he sent it to me, and I have sent it to the Ministry.
I mention the matter because I think that people in such circumstances should receive special consideration. At the beginning of such a scheme as this a man in such circumstances should be given the benefit of the doubt. I can understand some tightening up of the administration later if people take advantage, but at the beginning, and for a few weeks, it would be better for the Ministry to err on the side of generosity in cases of this kind rather than lose public good will. After all, this man feels aggrieved and sends a letter to me. No doubt, therefore, he will talk about it to many of his friends. It is this kind of official action which undermines public good will for the administration of the scheme, and public confidence in it, and it is a mistake to undermine that at the beginning of the scheme. I hope that the Minister will give an undertaking that he will use his influence to see that this sort of case is prevented from recurring.
Then there is the question of people who have to travel to hospitals. I do not know whether this is the case throughout the country, but in some areas with which
148
I am familiar there has been a concentration of hospitals. Some have been closed in consequence. Thus more and more patients are being directed to the most modern and most efficient hospitals.
In my part of the world more and more people are having in consequence to travel miles from the fringes of the city and from the countryside around to hospitals like the Stoke City General and the North Staffordshire Infirmary. People who have to travel such distances to hospital ought to receive priority in allowances. Some of them have to go for treatment every weekend. Then there are out-patients, such as injured miners. I have seen them standing in the cold awaiting public transport. More and more they are taking advantage of cars, and I think such patients ought to receive priority.
Public transport is already totally inadequate to deal with the demands in some of the industrial areas. I give concrete examples which can be checked if the Minister has any doubts. There are huge housing schemes in the city of Stoke-on-Trent. Relatively speaking, making allowances for the population, the city has the finest housing record in the country, but this has meant an increase in travelling. Many of the slum clearance schemes which have been carried out have resulted in people having to travel from the fringe of the constituency of my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) to the other end of the city. Transport is already totally inadequate. It is common to see long queues standing in the cold, in the rain, in the snow and fog for far too long, and now there is this cut in the amount of petrol allowed for use in public transport. This matter should receive further consideration and, if necessary, the cut should be restored in certain areas.
If any area has great need for the restoration of the cut, it is the area to which I have referred. Practically all the people in Stoke-on-Trent are engaged either in the export trade or in mining. It Grieves me to see men and women who have been engaged in workplaces where the temperature is high being compelled to stand a long time in the cold waiting for transport. Nothing undermines the health of the people more, and it affects production. It irritates the workpeople

149
and it affects their good will. We ought to see that public transport in areas such as this should have the maximum consideration.
I have long been closely associated with the men who are employed in Trafford Park. There are nearly 70,000 employed in that one small area, and 22,000 of them work in one establishment alone. No one knows better than the Minister, who has himself been closely associated with large-scale industry, that it is necessary to have the maximum and most efficient transport if we are to secure the best results in industry. These men are not playing with marbles. The management and the work-people have great responsibilities. They have responded to the nation's appeal from time to time. Their output is greater than ever, and now they have to suffer this irritation. I ask that this whole matter should be re-examined and reconsidered as soon as possible in the light of the contribution which these people make to industry and to the export trade, so that they can continue to make that contribution to the nation's economy in the way they have done during the past 20 years.
9.28 p.m.
Mr. T. L. Iremonger: I want to make one general point and one particular plea and ask the Minister for some information. My general point is very brief. I think that hon. Members opposite, who seem to have a general bias against the comparative generosity of the basic allowance of petrol, should bear in mind that we are having to pay, as one part of the price for the present situation, the price of unemployment in the car industry. If the basic allowance were drastically lowered, we should have to consider the repercussions which that might have, and the fact that we might have an even more serious situation in the car industry. If this is a temporary phase, it might be unwise to cause that amount of disruption for a short time. Therefore, my right hon. Friend the Minister of Fuel and Power is perhaps not very wrong in his view of the importance of maintaining the basic allowance.
At the same time I ask my right hon. Friend to pay great heed to the plea put forward from both sides of the House about commercial travellers, and I shall refer to one kind only, the self-employed man. He is in quite a different case from the traveller employed by a firm, because
150
the firm gets its petrol allowance and it is largely within its own discretion how that is used. The odds are, anyhow, that the firm will keep the man on, and will employ him more fully when more petrol is available.
On the other hand, the self-employed man faces ruin, and he could well be broken in the period during which we envisage petrol rationing will obtain. I have had a letter from a constituent putting in a nutshell the situation in which many such people find themselves. He writes:
"I am a commercial traveller I have to carry about 1½ cwt. of samples of various goods which are suitable for the jewellery trade."
It sounds rather substantial jewellery, but I have no doubt that figure is accurate.
"My total approximate mileage, which I travel in connection with my business, is 500 miles each week. Without a car I can earn nothing, and with my liabilities. …"—
That is the point, because at the end of his letter he refers to the need to earn enough to support his daughter, his wife and himself, in addition to meeting mortgage commitments. Obviously, he cannot stop living and he cannot reduce his standard of living because of this crisis. He continues:
"… with my liabilities I cannot afford to try any alternative means of earning a living."
It is on behalf of such people that I make my plea.
And this is the point of information to which I should be grateful if my right hon. Friend would address himself when he replies. The Minister gave me a prompt reply to this letter, which I sent on to him, very much in the terms in which he replied to the hon. Gentleman the Member for Southampton, lichen (Dr. King). My right hon. Friend concluded with this sentence:
"… special consideration will be given to the needs of self-employed travellers whose livelihood would otherwise be threatened."
So I gladly recognise that he has the special needs of these people in his mind.
What I ask my right hon. Friend is, what does he mean by "special consideration", and how and when will it be given? I have a nasty feeling that as the Minister's organisation is now at full pressure dealing with the basic ration, it will not be until the middle of next month that his officials will be able to consider

151
individual hard cases. In that time the mortgagees will start to foreclose, bills will have to be met, and the standard of life of these people will fall. They will be broken in the time it takes my right hon. Friend, with the best will in the world, to organise means for dealing with hard cases and special needs.
So I ask my right hon. Friend to tell the House tonight what prospects he can hold out to these people of doing something soon. What can we tell them? In sending on his letter to my constituent, I felt obliged to say that I thought it was rather vague and that it could give him little comfort.
Consequently, I am glad to have the opportunity to raise this subject tonight and to ask the Minister to enlarge upon, and give specific details of, his plan for dealing with hard cases. Some people may be broken by the crisis, and it is not right that that should happen. We should all take a share of the inconvenience. Those whose livelihood is involved must be rescued, and rescued quickly.
9.35 p.m.
Mr. George Thomas rose—
Hon. Members: Hear, hear.
Mr. Thomas: Being greeted with such a welcome from my hon. Friends, I feel almost like a maiden speaker.
I agree very much with what has been said by the hon. Member for Ilford, North (Mr. Iremonger). When a rationing scheme of any sort is being introduced, it is very important that it shall not only seem to be fair but shall be seen to be fair. The people must be convinced that, in spite of the difficult circumstances, justice is being done all round.
I have no doubt that the Minister, who is a reasonable man, will be trying to do the right thing in introducing this unpopular measure. It would be unpopular in normal circumstances, but I think that at the moment most motorists must be waiting for rationing day, when they will no longer be obliged to seek the favour of a gallon of petrol from a garage proprietor who is himself embarrassed at having to decide how to distribute his present allocation of petrol. During this week and the previous week, it has been a misery for motorists, some
152
of whom have gone from garage to garage, unfairly storing petrol which ought to be shared equally.
On Saturday my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) and I met the taxi drivers of the City of Cardiff. A taxi service is not a luxury service; it is an integral part of the transport system in a great city. Anyone who arrives in our great cities after about 11 p.m. is completely dependent upon the taxi services to reach the city outskirts. Today the taxi service in Cardiff is in grave jeopardy. What my hon. Friend the Member for Southampton, Itchen (Dr. King) has indicated about the taxi service in the great port of Southampton applies to the great port and City of Cardiff, where merchant seamen, arriving at all hours of the night, and carrying kit, have to be conveyed out of the docks. Our evening service of taxis will disappear unless the Minister looks again at the size of the petrol allocation.
Like my hon. Friend the Member for Itchen, I do not think that the London taxi drivers are having too much, but I am convinced that the London allocation is unjust when compared with that in other parts of the country. The allocation for taxi drivers in Cardiff is one-third of that for taxi drivers in London. Our taxi drivers making a journey to the outskirts of the city are allowed, technically, to pick up passengers for the return journey, but they rarely manage to do so, and they have to use twice the amount of petrol used by the London taxi driver, who almost regularly picks up another fare whenever he drops one. This is a very real grievance to the people of Cardiff.
This afternoon the Chancellor of the Exchequer said that he believed that the scheme will last for only five months. That is his hope, and we must share his hope. But is it not tragic that people should lose business and find their assets disappearing as a result of a scheme which is to last for so short a time? The Minister has an obligation to protect people who have rendered, and, I have no doubt, will continue to render, outstanding service to the community. At present taxi drivers are running their services at a loss, because of the price of petrol. Public transport systems have been told that they can increase their fares immediately, but taxi drivers have been told

153
that for them it will take eight weeks. All sorts of additional difficulties are facing them.
The Minister has decided on a reasonable basic allowance and a small supplementary allowance. That is probably because he has not the staff to administer a scheme giving a small basic ration and a more generous supplementary allowance which weighs all the issues at stake. However, it is his obligation to see that these cases are protected. I am sorry to quote my own constituency and that of my hon. Friend the Member for Cardiff, South-East so much, but it is because I know them better than I know other parts of the country. I have read in the Cardiff Press that it is possible that our public transport system will be curtailed after 6 p.m. That will hit all the late steel workers and dock workers in the City of Cardiff.
Mr. Ellis Smith: And miners.
Mr. Thomas: In other parts of Wales.
Mr. Callaghan: I have some miners in my constituency.
Mr. Thomas: My hon. Friend has some miners, and if he has, no doubt I have some.
An hon. Member opposite suggested that the Minister fixed the present basic ration with an eye on the car industry. If so, he is deceiving himself, although he is not likely to deceive anybody else on this question. So long as rationing is here, the car industry will be hit for six. We need not deceive ourselves about that. Only those whose livelihoods make it a necessity to have a car will buy cars. It is not the size of the ration, but the fact that there is rationing which is hitting the car industry. I am sure that the Minister knows that.
Mr. Arthur Lewis: Plus the fact that the car manufacturers themselves are being rationed and cannot produce the cars.
Mr. Thomas: Yes, my hon. Friend is as helpful as ever. [Laughter.] I see that during my enforced absence from the House he has not changed, and I am glad.
I believe that the Minister wants to do the right thing. I am sure that he does not want to damage these people who,
154
after all, are the middle class folk about whom hon. Members opposite talk so much, those thriving individualists who are seeking to build up their own businesses. We all like to try to help them, and we admire them and their efforts. I know the taxi service in Cardiff as hon. Members opposite know their taxi services. I see the hon. Member for Barry (Mr. Gower) nodding his head. He uses our taxi service. I hope that he will raise his voice on behalf of these people tonight—or is his Department involved?
I conclude with this submission to the Minister; although the scheme is expected to last for less than six months, it can destroy the well-being of some of our sturdiest folk. It can damage our national interests far more than he believes, if he does not reconsider using this precious raw material to the best advantage and ensuring that the Government protect employment.
9.45 p.m.
Mr. Geoffrey Hirst: I am sure that the whole House was very delighted by the contribution made by the hon. Member for Cardiff, West (Mr. G. Thomas), and to have the hon. Member back with us again, able to make his contribution with the very good humour and very good sense with which he always addresses the House. I hope that he will allow me to pay him that compliment.
I am afraid that I agree with a great deal of what has been said. I cannot disguise from the House that I trailed my conscience through the lobbies tonight. I am not at all happy about anything that is being done today, although I prefer a Conservative Administration to a Socialist one.
Here we are faced with the administrative action involved in this policy, namely, the rationing procedure. There are distinct difficulties about it. I am not happy about its effects. I agree with the hon. Member for Cardiff, West that the provincial taxi services have been definitely left in the cold as compared with London. I know how true it is that they have difficulties. They have some quite long hauls—if I am able to use that phrase—without any possibility of a return fare. They very rarely have a return fare. I feel that the Minister ought, therefore, to consider their case a little

155
more favourably. I know of their difficulties very well because I live some distance out of town, and I use the local taxi service. I know that they are at a serious disadvantage.
Much has been said about the commercial traveller and the manufacturing agent, who has a very tough job to do. I have good reason to know one of them very well, and I know the authenticity of the facts which he has given me. He has hitherto normally and legitimately used 60 or 70 gallons a month. He has received his basic ration, which is a great thrill, and has been allowed—after making a very reasonable claim for less than half of what he used previously, bearing in mind the emergency—precisely 2½ gallons supplementary ration. I am prepared to give the Minister particulars of that case.
I acknowledge my right hon. Friend's difficulties, but it is no use for him to say that we have a difficult situation before us and may have to face a 10 per cent. cut, when anyone with nothing approaching his information knows perfectly well that once the Suez Canal situation developed a 10 per cent. cut was absolutely boloney—it never meant a thing. From that stage I must, in fairness, say that I agree that it was either not very honest thinking or was extremely stupid—and I think that we must know which. Clearly, it meant more than that.
I know that the rationing machinery is terribly difficult, but the country wants to know the truth. It has always faced the truth if it has been told what it was. Are we actually in a temporary difficulty? I have little to say in America's favour, but I wonder if—having behaved in a despicable fashion previously—she has at long last come round, in some marvellous way, to our aid. It would be very interesting to know this.
What is happening to make this situation better or worse than it was? I have not heard any facts or information to guide me in my decision upon the Prayer, which I believe the Opposition were quite entitled to move. We must know the facts. Let us have them straight and fair, and from the shoulder, because the nation will take them. Unless there are some facts of that character we must fear the results of the Order to a certain extent.
I am told that some commercial users of derv will get only enough to operate
156
for about one-and-a-half days in a week, which is not much use. After all, it is not so long ago since a Conservative Government inveigled these people into buying lorries for use on long-distance hauls. Where is the price of their business now?
If we are in a state of siege economy in this country so far as fuel is concerned, let us face it. Let the country be told. But, for goodness sake, do not let us fiddle about with this thing—with people saying that something is going to happen; possibly for the worse, or that possibly the position will be all right in a few months' time, although the result in other directions may not be so good. But let us have the facts and know where we are. I am sick to death of playing about with this situation, and with people saying that it is not so serious as it might be, and this, that and the other.
I feel that the situation is very serious, but I want it put into the context of a statement of policy and not have this fiddling about with coupons. Are we facing a siege economy, and does that mean that commercial travellers, manufacturers and agents are to have their petrol supplies cut down, as would appear to be the case? Are the haulage people and the big lorry owners, who paid a high price for their vehicles—too high in my opinion, but that is another matter—to be cut down to supplies sufficient for one-and-a-half days instead of a week?
Incidentally, in the case of long hauls I would say that all coal hauls by road are not uneconomic. As many hon. Members know, I come from Yorkshire, where for years it has been the custom—it was the custom all through the war—for many firms, particularly in the textile industry, to get their coal straight from the pithead into the hopper, which was often at the side of the street. That has been the custom, and it is not good enough that they should now be told, either by the Minister of Fuel and Power or the Minister of Transport and Civil Aviation, how they are to get their fuel. They cannot get it by road, because the haulage people are not allowed to carry it for more than a certain distance. Where rationing is necessary, let us see that people get no more than their share, but do not let us allow Ministers to dictate to them how they shall use it.

157
That is my personal plea tonight. Whatever the facts, the country will face them. But let the people know them. Let us stop this business of fiddling about with vague ideas, and let the country know the truth.
9.53 p.m.
Mr. B. T. Parkin: One of the most alarming features of this Order is the danger that the Minister may have been advised by his Department that it was extremely easy to improvise or to operate a rationing system and that, of the many troubles with which his Department has to deal, that would he one of the least in view of previous experience. But I submit that previous experience is of no avail at all. There was a time when the call-up and the concentration of industry looked after many of the problems which had to be dealt with in due course; many of the individual personal problems and problems of small industries which hon. Members are bringing out in this discussion. Then, when supplies were getting difficult, the demand for them in so many personal and inessential industrial ways was decreasing. Contrariwise, when the war was over the increasing trickle of supplies into the country made it possible for the Ministry to relax, and to give extra supplementary allowances fairly abundantly from time to time.
The difficulty which faces us now is that the situation is hardly likely to improve in the immediate future. I hope the Minister has a considerable reserve to use in solving the problems being laid before him tonight and those which will be conveyed to him by correspondence and by deputations from all parts of the country. I hope that he will be able to announce some general principles to comfort those who are disquieted, who feel that the burden is weighing too heavily upon them.
We know that he is likely to make a statement about taxi-cabs. I ask him to consider two points in connection with London taxis. One is the undue hardship placed on what I believe is called the double taxi, the vehicle which is shared by two drivers who change over in the evening and who, therefore, have to share the allocation for the cab. This means that each one has the opportunity to earn only half as much as the owner-driver who can work either all day or all
158
night, as he chooses, with the complete allocation.
The other point—and I am sure that this is a long overdue reform anyway—is whether the Minister could possibly induce his right hon. Friend the Home Secretary to make it legal or permissible for a taxi driver who is going home, and who has got to go home or to a place where he can hand over to the man who is waiting to take the cab for the evening, to put up some kind of notice saying that he will take passengers in a certain direction, north, east, south or west, instead of having to decline all customers lest one should require him to go in quite an opposite direction. Quite an absurd waste of petrol is involved, and it is most infuriating. It usually takes place at rush hours because those are the times when the night driver wants to take over in order to get some of the traffic in the early part of the evening.
I also suggest to the Minister that he might look at the position of the commercial travellers whose difficulties have already been laid before him and to which he has made some sort of reply, not solely from their point of view. Their case has been irresistibly put tonight from these benches. Some of them, especially the self-employed agents, face personal ruin. I should like the Minister to look at the position from the point of view of cost, because we have been assured by the Chancellor of the Exchequer that all these calamities that we are going through are not likely to raise the cost of living by very much.
I do not know what proportion, but a very large percentage of the consumer goods sold in this country is sold by commercial travellers who go round the shops in the cities taking orders on a commission of a certain percentage or, if not on a commission, on a salary calculated usually on the equivalent of 5 per cent. Most manufacturers will add in their costing that figure of 5 per cent.
If the commercial traveller is not able to cover the ground, is not able to make the same number of calls and book the same number of orders, because of petrol rationing, then obviously the cost of getting each separate order will go up. If he has to use all kinds of devices, such as taking taxis and staying overnight in

159
towns where he would not have dreamed of staying before, in order to move on by train early the next morning, or something like that, clearly the overhead personal expenses will be considerably increased.
It seems to me inevitable that that figure of 5 per cent. sales cost will very soon be 7½ or 10 per cent. That is perfectly evident. Surely this must apply to a very large number of not only commercial travellers but technical representatives, consultants and those who have to move around a considerable area. I wonder if the Minister could give some consideration, quite unsentimentally, to the question of the increase in the cost of living, the increase in the cost of commodities, which will result from withholding petrol from those who normally have to travel about the country on their business in order that it may be used to provide a higher basic ration, or whatever else the Minister has in mind.
I am glad to see that the Ministry of Transport is represented here tonight by the Joint Parliamentary Secretary. Could the Minister of Fuel and Power also initiate discussions with the Ministry of Transport to find out whether some of the old-fashioned regulations about packing on the railways may be revised? Since the development of the internal combustion engine a number of industries have convinced themselves that their goods can only be delivered by road. Some regulations on the railways were laid down half a century ago and are quite inappropriate.
For instance, if we send furniture by rail, in order that the railways shall pay for it if they break it we have to disguise it so that it is unrecognisable by wrapping it up in straw and sacking. When the shapeless mass is delivered to the railway no railwayman can see what it is. He naturally pushes it around, and very often it gets broken, but the railways always pay for it. There is no bother at all.
Furniture manufacturers use this method for odd deliveries in parts of the country where they have no delivery of their own by road, but they do not mind. It is the railways' risk, provided the sender packs the goods as the railways want. If the railways break it, they pay. It is not true that railways are staffed by a lot of
160
inconsiderate people. The most sensible way to send things by rail is to expose them, so that railwaymen can see what they are. The trouble is that if an accident happens, then it is at owner's risk.
If the Minister will look at this matter he will find that there have been tremendous improvements in the technique of packing since the railway regulations were drawn up. I am certain that the railways will offer a much more sensible and up-to-date suggestion. That would be part of the drive to see that whatever arrangements are come to in allocating the limited resources at our disposal the criterion should be, what is the danger of increasing the cost of the products of industry? We should give priority to methods which can cut down costs.
10.3 p.m.
Mr. Julian Ridsdale: I add my support to the eloquent plea made by my hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) with regard to oil businesses and transport in rural areas, and especially to small businesses and those engaged in export. In many cases employees of those business have to come to them from a radius of at least fifteen miles. There are no services in rural areas like electric trains, trolley buses or underground services. The facilities are very meagre in many cases.
I have a case in my constituency of a man in the Customs and Excise Department who normally used to get to his work at 8.30 in the morning on his motor cycle. Now he can only get there at 11 o'clock at the earliest. I ask the Minister to pay particular attention to the fact that business requirements in rural areas have been cut down to 40 per cent. and that this is affecting the export trade of small businesses.
I would emphasise again the difficulties in connection with the rail bus and the bus services, which are becoming meagre. The buses are cut in winter, too. I plead for extra thought to be given to this matter, and for extra buses. I add my plea to those that have been made for the taxi driver in rural areas. I hope the railways will meet the challenge and will put down improved services for the people in the rural areas, who are being hit very much. I hope some of the stations which have been closed will be reopened.

161
Whatever inconveniences have been caused, we know that if action had not been taken by the Government at the time the inconveniences would have been much greater in a year or two years' time. Having said that, I ask that particular attention should be paid to the very difficult problems of businesses which have to keep going in rural areas.
10.5 p.m.
Mr. James Callaghan: I intervene for only a moment to read from a letter of a constituent which I think the House ought to hear and to which I want the Minister to pay attention, I have had two letters from a man who runs a motor car testing station. In one letter he said:
"In 1946, after 10 years service as a pilot in the R.A.F. I had no work, no home for my wife and family and very little money. With my war service gratuity I bought a small car and gave driving instruction and, by working from nine o'clock in the morning until 10 o'clock at night almost every day for ten years, I built up a school which provides employment to a number of ex-Service men who are now trained and highly efficient instructors. My fixed overhead expenses, rent, rates, advertising contracts, hire purchase on cars and equipment are normally covered by business expenses, but, since the sudden and unexpected cancellation of driving tests not only has the flow of new pupils ceased but hundreds of present pupils have asked for their fees to be refunded and cancelled all their further appointments until they have further news about the future of driving tests. Even if I dismissed all my employees and sell all my cars and equipment, I have no hope of fulfilling the expenses to which I am committed for many years ahead."
In a letter sent a week later, my constituent stated:
"Our business has deteriorated so rapidly that on several days recently a total of only two driving lessons remained for our ten cars and ten instructors who normally would have given approximately 100 lessons in that time. I am now forced by financial difficulties to dismiss six instructors and one receptionist, all ex-Service men and all expert men at the work and conscientious employees. I have already sold three cars at great loss to cover present expenses. Unless the tests are restored without delay I shall undoubtedly be forced to sell the remainder."
That letter says more eloquently than any long speech of mine. In the interests of people like that, if this shortage is to be a temporary shortage, I ask the Minister not to ruin by administrative action the livelihood of men who have worked hard to build up their small businesses. I have read the letters as they stand, and I beg
162
the Minister to remedy the situation by giving a definite date for the restarting of those driving tests.
10.8 p.m.
Mr. Harold Lever: I rise with some timidity, because my hon. Friend the Member for Itchen (Dr. King), who seconded the Motion, said this was a Socialist Measure and we ought to have more of it. I also find my timidity mounting as I find myself under the scrutiny and within the hearing of my hon. Friend the Member for Islington, North (Mr. Fienburgh), who has drawn my attention to the fact that sometimes I have been known to express views in this House which are not strictly the views of my party.
Mr. Wilfred Fienburgh: It is not that but the length of the speeches.
Mr. Lever: My hon. Friend has been here for part of the debate. If he will take my word for it, this particular brand of Socialism appears to have the unanimous support of the House, so if "We are all Socialists now"—except for myself—in the sense of 50 years ago, or whenever it was that Campbell Bannerman intiated the remark, the theoretical position seems to have been profoundly reinforced in the years between.
This is a melancholy occasion for me because, between 1945 and 1950, I campaigned continuously against petrol rationing. It seemed ludicrous that this particular method should be used when there is a shortage of petrol until we have at least taken adequate steps to ensure that private motor cars get no petrol at all until the fundamental and urgent needs of basic industry are satisfied.
It is a circumstance to which I have drawn the attention of the House more than once, that the British people always feel that, when they suffer something, good is bound to come from it. This is a point of view which has enabled them to erect certain psychological defences to the British climate, and is, perhaps, responsible for the fact that we get Conservative Governments elected for more than one electoral period at a time.
I notice that in this crisis all the Tory leader writers have produced a positive efflorescence of metaphor and simile, in which flowers are plucked from nettles, blessings are seen in disguise, salvage is

163
redeemed from wreckage, and so on. The particular flower that one might have hoped would come from this particular nettle—if I may select a metaphor which commends itself to the most classically-minded Members of the House—and the one which I should have liked to have seen, is that some ordinary, commonsense realism might have prevailed in the petrol situation.
The facts are that this country is using more cars and more petrol than it can afford—on private motoring, at all events. This was the case even before this present crisis came upon us. It is likely to be the case long after the Minister's optimistic forecasts of the end of rationing have been fulfilled—or disappointed. When chronic crisis had superimposed on it an acute crisis such as the present situation, one might have thought that the Government would bend such talents as they possess and such energies as yet remain to them towards reducing the number of cars on the road, so that, at least, we should get a long-term benefit from it. But no—not at all.
On the contrary, this petrol rationing is a deliberate Governmental device for keeping the maximum number of cars on the road with the minimum amount of petrol available. It is obvious to those who use ordinary powers of observation that we have too many cars on the road. Incidentally, the remedy is not to make more new roads than we can already afford in order to support more cars, because we are already running more cars than we can afford in any case. But, as the traffic on the existing roads has reached a stage of dislocation, of danger to life, and of poisoning the atmosphere, which alarms every sensible member of the community, one would have thought that the Government would have used this opportunity to reduce the number of private motor cars on the road instead of maintaining, as I say, the maximum number with the minimum amount of petrol.
I see the advantage of being called now in this debate, in that, having listened to speakers on all sides of the House, I find the ingenuity which manages to find hardship in every direction, and of a special character, positively amazing. Either the Minister is appealed to on the ground that those in the country are ill-treated, or, on
164
the other hand, that those in the towns have to carry the heavier burden—whether it is the taxicab owner, or the double-shift taxicab driver, or the old, or the sick, or the young, or the ill, the case is made for a further extension. It is perfectly plain that it is only the time of the House that limits the special number of categories entitled to increased rations, and perfectly plain, also, that although everybody is enthusiastically in support of this rationing measure in general, nobody is satisfied with it in particular.
All these "Socialist" supporters, if I might call them that, have the idea of "Come the revolution, we will have half the imports and double the rations for everybody." That is the kind of logic implied by these demands. We have to face the fact that there is a limited amount of petrol, and that one cannot go round increasing, on the ground of hardship, the ration that has been given without making a demand for petrol greater than the country can afford.
In my view, it is a monstrous reproach to us all that, in what is said to be a siege economy, the Government should issue millions of ration books to private motorists for pleasure use. I am the last person who can be accused in this House of being a kill-joy; I like relaxation. But it seems to me that, if we are in a crisis, the Government should be doing something better than working an elaborate rationing system so that the existing small supplies are evenly spread, to the maximum expense and inconvenience to everybody, over the maximum number of motor cars. I should have thought the Government would have been better occupied in devising some means of lessening the burden on the roads and reducing the number of cars.
It is quite true that motor manufacturers will have to lay off men, but, of course, if our economy goes to "pot", it will be not only motor manufacturers who will be laying off men. The fact of the matter is that an intelligent diversion of labour from socially undesirable production—because it is socially undesirable to saturate our pitifully over-pressed roads with further motor cars—would be of greater benefit to the community in these days.
Far from getting any benefit from the misuse of our labour and misuse of steel supplies—and heaven knows what dollars

165
we have spent on importing steel far motor cars in the last few years—John Citizen is not by any means the gainer. It is well to remember that when all these passionate pleas in the name of Socialism are being heard about petrol rationing, the great majority of citizens have no cars at all; and they may well be ex-Service men, the old, the sick, the wounded and so forth. They also are entitled to consideration when their livelihood is being undermined by a misuse of the nation's resources.
Mr. C. R. Hobson: If my hon. Friend would allow me to make a comment here, those citizens who do not possess motor cars are even more adversely affected than they need be because petrol which could be used for public transport is now being diverted to the private sector, and, in fact, public transport has been considerably reduced.
Mr. Denis Howell: May I say to my hon. Friend that, in industrial areas such as Birmingham and Coventry, to lay off men and to follow the course he is advocating would lead to complete dislocation? Would it not meet the case far better to say that what the country needs to do is not to make more cars but to export more cars, which means getting back to a planned economy such as we had in the days of Sir Stafford Cripps?
Mr. Lever: I would agree with both my hon. Friends, and I would say to my hon. Friend the Member for Keighley (Mr. Hobson), in response to his intervention, that he is quite right to point out that petrol could be much better used if diverted to public transport services. But it goes even further than that. Because of the clogged roads, such petrol as we do allow for the bus services, especially in Central London, is wasted; and so is the labour of our drivers. I do not know what the technical expression is, but the number of passengers per man-hour or per omnibus per route-mile, or whatever it is, would obviously go up if the roads were clear. That is plain for anyone to see at the bottom of Park Lane, for instance, every evening, where the road is jammed and blocked tight with a moronic snake of suburbanites who have trundled 'their cars in to London in order to obstruct the roads still further as they ride around the streets, poisoning the air and obstructing public transport.
166
All this misuse of our resources is sheltered and protected in the sacred name of sentimental equality by the Minister, who ought to be thinking in terms of rather how he can use this crisis to bring home to the nation that we are using more cars than we can afford on the roads and more petrol than we can afford on the roads. All this talk of better and bigger roads to accommodate the cars we cannot afford, which use the petrol we have not got, is utterly misplaced, not merely now in time of crisis but even when this immediate crisis is over. No sane man should dream of having more cars until he has more roads. To do so is to have the order wrong, and, if I may misuse the analogy, to put the cart before the horse.
Mr. Hobson: If my hon. Friend will allow me to say another word. I should just like to point out one or two things in his support. My hon. Friend will agree that, in those places where they have the best roads, in the United States or in Germany, in cities like Chicago, Essen and Dortmund—
Mr. Anthony Fell: On a point of order. Is it in order for hon. Members, one of whom certainly has been in the Chamber only a short time—
Mr. Hobson: That is not true.
Mr. Fell: —to use the speech of an hon. Member on their own side of the House to make their speeches by way of interruptions?
Mr. Deputy-Speaker (Sir Charles MacAndrew): If an hon. Member gives way, another hon. Member can intervene. It is done every day.
Mr. Hobson: Where there are the best roads, there is the greatest congestion, as in the United States of America and West Germany.
Mr. Lever: And the greatest number of accidents.
I do not want to detain the House any longer. What I want to say is that as the result of the fact that the Government allow, and have allowed for some time, an excessive number of motor cars on the road, and by this rationing are preserving them, in spite of the shortage of fuel and in spite of our economic position, John Citizen gets about more slowly in his public transport, he has to

167
inhale fouler air and his children are subjected to ludicrous danger in what purports to be a civilised society—because clearly, in this regard, we are less civilised than we were twenty-five years ago. Because of all this claptrap, which supposes that all this overcrowding of the roads with motor cars is for the social and moral good of the community, children are exposed to danger, the economy is distorted and skilled labour, which could be more profitably devoted towards earning our bread—
Mr. Fienburgh: Has my hon. Friend got a motor car? If so, what will he do with it, in view of his argument?
Mr. Lever: My hon. Friend asks whether I possess a car. I am happy to be able to tell him that as long as all my colleagues, including, no doubt, himself, are allowed to make a nuisance of themselves by possessing motor cars, I see no reason to impose a self-denying ordinance on myself.
Mr. Ellis Smith: As one who is not in the same category as my hon. Friend, may I ask whether he does not think it right that we should be concerned about the thousands of John Citizens who want to travel from Manchester and Salford into Trafford Park and that they should have adequate transport?
Mr. Lever: I have not said otherwise. Trafford Park, however, seems to me to be a singularly ill-chosen example. My hon. Friend's views and sincerity I have never disputed, but Trafford Park is the heart of the industrial centre of Manchester. If any part of Manchester has a public transport service, surely it is Trafford Park. If it has not, what is needed is surely not a plea for the relative handful of men who have the cars but a plea for a decent public service to be obtained for that industrial area.
Mr. Ellis Smith: My hon. Friend either has not understood the speeches that have been made or is putting a wrong interpretation upon them. We who have made our pleas have spoken as realists. We have a situation which is not as we should like it to be. Therefore, within those limits, we want to bring about the best arrangements for the thousands of people living in areas such as those represented by my hon. Friend.
Mr. Lever: I hate to find myself in disagreement with my hon. Friend; I am not at all unsympathetic to his request. What I am saying is that given the limited supply of petrol available to the people of this country—first, by the crisis which has come upon us, and secondly, by the chronic crisis in our affairs—we should all be much better advised in pressing that such petrol as is available is directed towards improving the public services, instead of cutting them down in this lamentable way.
When I hear, from both sides of the House, a remarkable moaning and gnashing of teeth on behalf of the supposedly about-to-be impoverished taxi drivers and taxi owners, I am bound to throw my mind back to the time when I returned after the war; and I cannot say that I noticed that those who had been occupied during the petrol rationing period in driving taxi cabs appeared to have suffered any spectacular malnutrition as a result of the petrol rationing which had been in force. I have no reason to imagine that anybody need fear any such lamentable occurrence in this connection now.
It is possible—and nobody is better qualified to do it at greater length than I am—to enlarge indefinitely on the number of categories who ought to have the special favour of the Minister, who no doubt is waiting to reply so that he can refuse them all, as I hope he will. One could apply on behalf of people who have been told by their doctors that they have incurable cancer or any other incurable disease. Why should they be deprived of driving in the last months of their lives? Why should we not give special consideration to those orphaned in the war? Why should we not give special consideration to those who lost limbs in the war? I do not say that sneeringly. I am merely pointing out that the categories of humanity entitled to special consideration can be enlarged indefinitely until they embrace the whole community.
In all probability the Minister will have to consider some 3 million applications, and give each and every one of them careful and impartial consideration to determine what the judiciously considered and socially desirable share of the community's restricted supplies of petrol is in each case. The only right way in which the available petrol should be

169
used, apart from its use for certain categories of high priority personnel such as doctors and those in urgent medical services, is in the public transport services, to save them from being cut down in the present manner.
I conclude with this thought. I believe myself that this country is facing an economic crisis, and that it may face siege conditions, but that this is not the way to bring home that fact to the people, and that a much more realistic and serious approach is required instead of the somewhat flippant approach which, it seems to me, is widened, though perhaps unconsciously, by this attitude that sympathetic consideration should be given by the Minister to these special applications. The most serious consideration should be given by the Minister to the allocation of this precious fuel.
10.27 p.m.
Mr. C. N. Thornton-Kemsley: At this hour of the night I can make two promises, first that I shall be very brief, secondly that I shall stick very much more closely to the Order than the hon. Member for Cheetham (Mr. H. Lever), whom the House nearly always enjoys to hear. I want to speak about one category of persons who have not been mentioned in this debate so far and who are, I think, deserving of special attention, not because of hardship or anything of that kind, such as exists in some of the cases which have been mentioned—
Mr. Hobson: On a point of order. In view of the legal nature of this Order which we are discussing, Mr. Deputy-Speaker, do you not think we ought to have present one of the Law Officers of the Crown in order that we may have a proper explanation of it?
Mr. Deputy-Speaker: That is not a point of order.
Mr. Thornton-Kemsley: I was going to make a special plea tonight for surveyors, whose position has been brought to my notice in my own constituency this weekend, and for whom I can speak with a certain amount of personal knowledge, because I am a member of that profession myself, and to that extent I should, of course, declare an interest.
The surveyors nearly all work in the open air; they have to inspect properties with which they deal, otherwise they
170
are very likely indeed to be negligent and to fail the clients for whom they act. I want particularly to speak about land agents, because their plight will be extremely difficult in present circumstances. They have to deal with tenant right valuations on changes of tenancies on farms. They have to deal with stocktaking valuations for Income Tax purposes and for other reasons, and with farm management. That kind of business takes them all over the countryside and over areas in many of which there is no public transport whatsoever.
Mr. Hobson: Why cannot they ride horses?
Mr. Thornton-Kemsley: I have heard a number of speeches here tonight about people in urban areas, where public transport of some kind or another is available, but I am thinking especially of remote areas of Scotland where there literally is no public transport at all, but where these men have to travel about if their duty is to be done properly. I have very good reason to believe that the Agricultural Departments are very concerned with the difficulties which will be faced by this profession at the present time.
Then there is the general practitioner who deals with valuations of every kind, with valuations for Estate Duty purposes, for insurance purposes, for mortgage purposes, for town planning purposes, and in derequisitions and compulsory acquisitions, and with sales and lettings of properties, and all that kind of thing. In every case, personal inspections are involved.
There again, it seems that in both the countryside and the towns it is the small men who will be hardest hit. In the case of a big firm, all the surveyors may have cars, or may use cars belonging to the firm, but only one car or perhaps two cars may be used by a small firm, which will thus have great difficulty in getting the work done. Much essential work will remain undone if surveyors are restricted to the 300 miles per car which they are at present being allowed.
I want to put two suggestions to the Minister. First, while I do not suggest that a special allocation of petrol should be made—I do not think that would be right—I consider that those who are administering the scheme locally should, so far as possible, be persons of understanding who appreciate the needs, in

171
particular, of the profession in the countryside. Secondly, my right hon. Friend should do what he can to give instructions that those in charge of the administration of the scheme should deal with individuals according to their need and according to the need of the public which they serve.
10.31 p.m.
Mr. Victor Collins: I think the Minister will agree that throughout the debate—
Mr. Hobson: It is not over yet.
Mr. Collins: —there has not been the slightest sign on the part of hon. Members on this side of the House to make any political capital out of the present situation. There has been criticism of the Order from every speaker, but it has all been constructive.
It will be impossible for the Minister to answer all the points which have been made, but I am sure he will study them and, as soon as possible after the debate, make a further announcement, because one of the greatest difficulties for industry in the present situation is that people do not know what is going to happen.
When the Minister announced the curtailment of petrol supplies, he said that it would be about 10 per cent. In a Question, I asked him whether that did not mean that supplies for ordinary motorists would have to be cut by 50 per cent. The Minister replied that it would be at least that. As has been pointed out, now that fuel supplies are to be cut to 75 per cent., it ought to mean no basic ration at all for ordinary motorists. Then it would be possible to have proper priorities.
In order to be brief, I shall put a series of questions to the Minister. It is obvious that an enormous number of inquiries will be addressed to hon. Members from all sorts of people. Does the Minister propose to put into operation the policy adopted in 1946 whereby hon. Members were invited to write to regional petroleum officers to have the problems of their constituents attended to, for that would save an enormous amount of time for his Department and for hon. Members?
Will the Minister look again at the absurd situation in which responsibility is divided between his Department and that of the Minister of Transport and
172
Civil Aviation? There seems to be no possible justification for it. Each industrial firm which runs motor cars for business as well as motor vans has to deal with two Departments. I know firms which also have farms, and they have to deal with both cars and tractors, and so on. These have to be dealt with on one form, and they receive a block allocation. Such firms will have no idea at all what the priorities ought to be within the block allocation. It seems wholly absurd that that sort of thing should happen.
There has been no disposition to make party capital out of the situation. Certainly the country as a whole thinks that it is time the weeping, wailing and gnashing of teeth were over and that we got down to the job of dealing with the situation. However, if the Government expect to be supported from this side of the House, as I think they will be, the measures they put forward must be sensible, workable and fair and have nothing of a Tory doctrinaire nature about them. We are prepared to support things which are sensible and fair.
We are therefore entitled to know—if possible tonight—why there has been such a high basic ration. Why could not the basic ration be related to a particular vehicle and to particular months? Is it the case, as one national newspaper said, that as much as 9 million units may be put on the black market because the cars will not be used? Why are garage proprietors, who are already getting 5d. a gallon profit on petrol, to get another 1½d.? Why is it that, road haulage costs having gone up only 5 per cent., prices will be increased by up to 10 per cent.? Why should London Transport, which told us only a few weeks ago that it could save £2 million a year if it could increase the average speed of its vehicles by one mile an hour—and in view of the reduction of traffic in London it must be doing that—be permitted to increase its fares by £2 million?
There are one or two questions about industry which I want to put very quickly. Taxis have been frequently mentioned in the debate tonight. There is no need for me to remind the Minister that taxis are a public transport service and operate under a licence and conditions about their fares and in other respects which put them on lines similar to those of other forms of public transport. I do not want to make invidious

173
comparisons and still less fail to support the case for provincial taxis, but conditions in London are different and although there is a great deal of idle mileage in going from the centre of a city like Cardiff to the outskirts, the distance from the centre of London to the outskirts is much greater.
The other day I was talking to the proprietor of a taxi service. He told me to my astonishment that although London taxi-cabs charged 1s. 3d. a mile, the average paid time worked out at 6d. a mile. He said that he would be very pleased if paid running time worked out as high as 8d. a mile. Those are astonishing figures, but they are figures for London. When the Minister considers the very strong case for taxi services, will he bear those points in mind? Not only in the provinces will the small man be driven out of business. Many London taxi-cab proprietors will not be able to meet demands and carry on business.
Will the Minister also say whether there will be any exceptions to the rule that no extra petrol will be allowed for travelling to work? For example, has he thought of the position of people who work in markets and have to start at four or live o'clock in the morning and live perhaps ten or eleven miles outside London? They cannot possibly get to work except by using a motor cycle or motor car. There must be exceptions to the rule for workers of that kind. If there are not, the Minister will be saying that the markets must open an hour or two or three hours later and that the shops they supply must open later, which is not possible.
Will there be exceptions for particular industries? I am not talking about the great basic industries like coal and agriculture and so on, but thinking of firms like one in my own constituency which supplies machine tools through its representatives who go about the country and perform a very useful function.
The position at the moment is that if these people have received any supplementary coupons at all they have had 50 per cent. of the basic ration, which means that at the most they have had only about three-eighths of their normal requirements. Similarly, in industry, firms which run vehicles for industrial transport seem to be all lumped together—the
174
local greengrocer with the firm which runs a nation-wide transport service. Priorities must be exercised, and these people must know soon what their position will be.
They may be receiving this week—or they may already have received—their basic allocation from the Ministry of Transport. They are told that they must not re-apply just yet. The fact is that over quite a wide range of industry the basic allocation for industrial goods vehicles is only about 23 per cent. or 25 per cent. of their normal supply, which means that at the end of four weeks, if they go on at the normal rate of consumption, they will be without supplies. I am firmly of the opinion that with economy and careful usage everybody can reduce his consumption without reducing efficiency, but it is utterly impossible, however efficient one may be, to reduce consumption from 100 per cent. to 23 per cent. or 25 per cent.
This allocation must be on a sensible basis, and the Minister must tell us the type of priorities he will employ. The Minister of Transport, in answer to a Question of mine last week, gave some of the priorities, and said that a number would be added, but the types he gave were far too limited to give industry any real idea of what he means to do. I therefore ask the Minister, first, to answer as many as possible of the questions put to him, at least in a general way, and secondly, to give an assurance that he will go into all the other suggestions as speedily as possible and make further announcements as quickly as possible, so that industry can have a fair idea of what the future holds for it. He should give it as much information as possible, so that it can do its utmost to carry on within the allowances it is likely to get.
If the Minister will see that industry is told that, and that some of this absolutely wasteful use of petrol is wiped out, and if, as soon as possible, he retrieves the error he has made in giving such a high basic ration, and gets down to proper priorities and a grading of industry, we can get by without too much difficulty and without halting our production. We must not treat industrialists like children. We must tell them as much as we can and give them a chance to get on with the job.
10.43 p.m.
Mr. Anthony Fell: I want to make a plea to the Minister about my constituency. It is seldom that I make such a plea, but this evening I must. Last winter the Minister of Labour said that the unemployment problem at Yarmouth during the winter was one of the most difficult and persistent that he had had to deal with. Unfortunately, this crisis has come right at the beginning of the winter, when the unemployment figures in Yarmouth are beginning to mount quite speedily. Because of the petrol rationing it appears that those people who are going to be thrown out of work will have practically no chance of getting work on the labour market in Great Yarmouth.
I therefore appeal to the Minister to consider especially those serious cases which I shall let him know about from Yarmouth—as I get particulars of them. I can let him have one or two now. I appeal especially for the driving schools and the taxi drivers. There are not very many of them, but they are in as difficult a case as anybody anywhere else.
One or two speakers before me have managed to cut the time rather fine, and there are still a few hon. Members opposite who wish to rise, and I do not want to stop them.
I was in agreement with what the hon. Member for Cheetham (Mr. H. Lever) was saying about private rationing. I did not agree with him that we should use the situation in order to get rid of cars from the roads; nevertheless, I agree with him to the extent that it would be reasonable to expect the people—I believe they would expect it themselves—not to be allowed pleasure petrol if it meant that other people lost their livelihood. We must have complete frankness from my right hon. Friend. It should be put to the private motorist that in order that people should not lose their livelihood the private ration has to be even less than it is. That is what the nation expects.
It has been said that we are running into a siege economy. Whether we are or not, I do not know, but we ought to be, if we are not, and for one reason, if for no other. It is that the nation cannot afford at this stage to spend a single dollar more in the United States for oil or anything else that is not absolutely essential and imperative to keep the nation going.
176
I hope that the Minister will not be afraid to tell the British people—such an appeal was made by my hon. Friend the Member for Shipley (Mr. Hirst)—the stark, absolute truth, and will not be afraid to make sure that priorities are given to such as public-service vehicles, industry and to all people who might otherwise be out of jobs.
10.48 p.m.
Mr. C. R. Hobson: I am in agreement with the hon. Members for Cheetham (Mr. H. Lever) and Yarmouth (Mr. Fell). There is an over-all shortage of fuel oil and petrol as a result of the policy of Her Majesty's Government. That has to be faced. Therefore, there has to be rationing. How is that rationing to be carried out and what industries should be rationed?
The Minister has fallen into the error of following somewhat slavishly the method used when petrol had to be rationed during the war, although the pattern is entirely different. I speak from wide experience in the electrical generating industry. I know of no power stations that were fired with fuel oil before the war, but many are now so fired. The four boilers in the Neasden power station of London Transport are today fired by oil. Before the war the firing was by pulverised fuel. There are other stations now fired by oil. On the assumption that there would be an abundant supply of oil, many industries changed from solid fuel to fuel oil.
Therefore, the prerequisities of industry are infinitely greater now than they were during the worst period of the war when so many tankers were sunk through enemy action. But these needs, I assume, are known to the Ministry, are they not? I put that in an interrogatory form, because I recollect that in the coal shortage of 1947 the Ministry did not know the amount of coal consumed by British power stations, which got us into a pretty fine mess. There is, also, the question of the maintenance of strategic stocks, which cannot be revealed.
I think that fuel for public transport should not be cut, neither should it for industry nor the power stations. If a cut has to take place, it should be applied to the private motorist. We cannot avoid this, because of the dilemma we are in. I should be much happier in supporting this Order if I knew, and if the House

177
had been informed, that there had been consultations between the Minister of Fuel and Power and the Minister of Transport and Civil Aviation with regard to introducing legislation to compel traffic to be taken off the road and put on the railways. That has got to be done sooner or later because of congestion on the roads. I notice that Sir Brian Robertson, reported today, said that the railways are carrying under 20 per cent. of their capacity. Are we going to allow goods to be taken by road which could go by rail and yet have the drifters of Yarmouth, the power stations and public transport short of oil?
We cannot just try to please everybody. The Government have got to be tough. The country is in a shocking position economically. The hon. Member for North Angus (Mr. Thornton-Kemsley) pleaded for extra petrol for surveyors. I could make a case for the owners of taxicabs, and every hon. Member could make a special plea. We cannot at this stage do that. I therefore find it difficult to support this Order, because it is an attempt to please everyone. We need real toughness from the Minister with regard to the private motorist, and we need also an assurance that oil supplies to industry and the power stations will be maintained.
10.54 p.m.
Mr. G. R. Strauss: The Minister has heard in this debate many criticisms from all parts of the House about his scheme for rationing motor fuel. I do not think there can be any doubt that during the six months to come, he will get far more. But we all agree that, in present circumstances, some rationing scheme is necessary.
There has been remarkable restraint on the part of my hon. Friends today in that they have refrained from hinting even as to who is responsible for the fuel shortage from which the country is suffering. We have avoided that subject, and we have concentrated upon considering whether this scheme, which we now have before us, is well conceived and whether it was wisely launched. By "well conceived" we mean a scheme which would obviate entirely damage to our industries and our economy, that would minimise hardship amongst individuals and minimise the opportunity for black marketing and all the sense of injustice and frustration which comes from such
178
a situation—a scheme, moreover, which maintains proper social priorities.
Before saying a word or two about the scheme, I want to ask a question about its launching. I hope that the Minister will be able to give us some reply because the country has been much disturbed and believes that the launching was badly done. We do not know, we cannot judge, we are not sufficiently in possession of the facts, but it appears to the ordinary layman that there was far too long a delay in bringing the scheme into operation, that announcements were made earlier than were necessary, and that, as a result, a large number of people were able to obtain an unfair advantage. A large number got a great deal of petrol and hoarded it, while others were able to get very little. Indeed, I know some who were unable to get any because all the garages to which they applied said they were unable to sell them any.
It seems that the scheme was launched in such a way, particularly in the time it took to get into operation, that considerable damage was done, and a considerable amount of justified public criticism was expressed. The Minister owes it to the House and the public to tell us why he could not do this more quickly and better.
I wish to refer to a paragraph in the Order to which, so far as I know, no attention has been paid, either in the House or elsewhere, but which seems a subject of proper criticism and condemnation. I refer to paragraph 8, which seems a bit of red tape that will cause an unnecessary nuisance. That paragraph says:
"Where any coupon is surrendered by any person to any dealer …"—
meaning the retailer—
"as aforesaid …"—
in other words, where the person gets his petrol and surrenders his coupon—
"… that dealer shall
(a) keep a record showing—

(i) the name and address of that person;

(ii) the date of the surrender;

(iii) the combination of letters appearing on the coupon;

(iv) the total amount authorised by the coupon;

(v) the period of validity of the coupon;

(vi) the date of each supply furnished to that person in respect of the coupon, and the quantity then supplied."

What does that mean?

179
It may be that several people queue for petrol on a cold windy February morning at some remote country petrol station when snow is on the ground, and each time a customer surrenders a coupon the man looking after the pump has to bring out a book and fill in a lot of detailed information. Is that really necessary? It never happened under the old petrol rationing scheme. Is the object to make a check? I do not know, but it appears to be awful nonsense, and will cause more swearing among customers and those serving petrol than anything else. It does not appear to have any justification. I hope that the Minister of Fuel and Power will tell us why it is there, if it is really necessary, and whether it ought not to come out.
There has been criticism that a large number of people who will get petrol coupons will not use them. The British Road Federation has estimated, with what justification I do not know, that the number of people who do not licence their cars in the first quarter of the year is 500,000 out of about 3½ million users of private cars. That may be an exaggeration, but the Minister must know the number. Plainly the number is substantial. Yet all those people are to be entitled to draw petrol in respect of their coupons for the whole four-month period. Really, that again is a nonsense.
Moreover, and this is another estimate put out by the people in the petrol industry, the number of gallons involved is about 9 million. Taking the half-million people and the four-month period, coupons for about 9 million gallons will be issued which will not be used. That four-month amount will all be used by the owners of cars either in the fortnight between 17th and 31st December or, as is much more likely to happen—and is, indeed, bound to happen—those 9 million gallons will be given away or—far more likely—sold on the black market.
It therefore appears that, by deliberate action, the Minister is by this scheme creating a black market of enormous extent—himself creating a big pool of coupons, representing about 9 million gallons of petrol, which will be at once available for sale or distribution at the very beginning of the scheme. I hope that we shall have an explanation of that
180
from the right hon. Gentleman, and that he will tell us whether or not that is really sensible.
cannot understand why it is laid down that the owner of a car can use, if he so wishes, all his petrol in the first month, but that if, for some reason—he may be ill, or may not wish, or be able to use his car—he does not use his car for the first month, he is not to be allowed to use that first month's supply in the second or third month. Unless I have misread the document, he is not allowed to use in the second, third or fourth month, petrol that he has omitted to use in the first. That seems to be awfully unfair.
Mr. Hirst: Is the right hon. Gentleman speaking of the basic allocation there?
Mr. Strauss: Yes, I am speaking entirely of the basic allocation.
Mr. Hirst: It seems a most extraordinary statement.
Mr. Strauss: I want now to come to what is the fundamental objection to this scheme. It has been put during the course of the debate by almost everyone on both sides of the House who has spoken. As a result of this scheme, very many people will be able to continue pleasure motoring, or be able to use their cars, if not for pleasure, for unnecessary purposes, while very many other people will not be able to use their cars for necessary, or even essential purposes. By "necessary" or "essential" I mean purposes essential in the national interest, or essential to enable the individual to maintain a livelihood.
We do not know how much oil for distribution the Minister expects to arrive during the next four months—he probably does not know himself and has to guess—but it seems, from all the statements that have been made by the Minister, and the notices which have been sent out to the regional petroleum offices, that in fact this is exactly what will happen. We have been told that the basic ration is to be high compared with what it was during the war—that it will average about 200 miles a month for each car. We are also told that the supplementary rations are to be very tightly held.
I submit that that, in effect means that the Government's deliberate policy

181
is to make the minimum interference with the great bulk of the ordinary motorists, and to enable them to continue using their cars to a considerable extent, but that the Government are giving scant consideration to all that substantial number of people who need to use a car a great deal for their livelihood, or to maintain businesses which they may have built up, or, indeed, for serving the industry and economy of the country.
Indeed, one can go further and say that the result is that there is not going to be sufficient petrol to maintain our public transport services. That is very serious. I should have thought that the Minister, looking at this matter from the national point of view when introducing his scheme, would have said to himself, "First, I must maintain the essential services, and the transport services are essential; they should not be cut. Next, I must see to it that those who use their cars for essential services have sufficient petrol."
I understand that doctors are to get what they need, but I gather that they are just about the only ones, apart from midwives and perhaps veterinary surgeons. But there is a large number of other people who do essential work for industry who cannot run their factories properly unless they have a certain amount of transport to enable them to go about and see to things, visit branches, etc. I am speaking of small industries particularly, where a business may have only one car. Such people as that should have an ample supply of petrol.
Many of the people who have been mentioned during the course of this debate perform an essential public service, and they ought to be assured of getting a reasonable supply of petrol; if not the full amount, at least as much as they got during the war. Taxi drivers have been mentioned. They are an essential part of our transport system. They take people to and from the stations, and they take the luggage too, which, it should be remembered, often cannot be carried by the public transport services at all. Moreover, the public transport services, particularly in the country, do not necessarily go where people want to go.
Taxi drivers should have a sufficient amount, far more than what I understand
182
is suggested at the moment. Many of the other categories which have been mentioned, people engaged in commercial activities, etc., whose work is really important and essential, ought first of all to be assured that they will get enough. Motor driving schools are another example: it would be a serious thing for safe standards of driving in the country if many motoring schools were closed.
Instead of a sufficient supply being available for all these people, so far as one can judge from the announcements so far made, there will he a quite inadequate amount, while the general level for ordinary consumers is to be kept up fairly well. They will suffer, of course; those who want to do much motoring will not be able to do it; but it will be possible to do 200 miles a month, and much of that will be for pleasure purposes and unnecessary work. That, of course, is all right; one would not mind that at all if one did not fear that at the same time there will be a large number of people who will be severely injured and damaged by this rationing scheme.
I understand that the general supplementary ration which has been laid down, according to information in the Press, provides for 3 gallons a month for cars of a horsepower between 8 and 9, 4 gallons for horsepower from 10 to 13, 5 gallons for cars of a horsepower from 14 to 19, and 6 gallons for cars of 20 horsepower and over. I understand that that figure has been allocated quite indiscriminately and given to practically all applicants in industry as a supplementary ration, without any close inquiry at all as to the relative needs and requirements of the applicants. That is all wrong.
It is also unfair that not sufficient petrol has been reserved by the Minister to give supplementary rations to those, other than taxi drivers or those who need petrol for commercial purposes, but who will suffer serious hardship as a result of living in the country, perhaps in remote places. They may be elderly people who have to travel every day to their work, using their cars to go to and from the station. In future, they will be able to get only their basic ration and a very small supplementary allowance.
Such people will suffer greatly. I do not know what they will do. In many

183
cases, they will have to walk—and the worst months of the year lie ahead—or they will not be able to go to work at all, even though they make all the arrangements they possibly can for the pooling of transport with their neighbours. Country people who live a long way from the stations will obviously suffer severely, compared with the town dwellers.
It seems that all these difficulties will arise because, in our opinion, certainly in mine, the Minister did not put sufficient emphasis on social priorities when he devised his scheme. Whether our fears are justified, only time will tell. I hope they will not be. I do not want the Minister to get into trouble over this. I would much rather he got into no trouble and that we could praise him at the end of the day for introducing a wise scheme which caused little hardship.
Looking at the position now, however, and taking account of the comments and pronouncements made by the Minister, we very much fear that he has gone wrong and that he has been too much concerned by the technical difficulties of drafting a good scheme or he has been too keen on getting the maximum popularity from the maximum number—that, is, the ordinary car owners, who want the basic petrol—rather than the small number who want the supplementary allowances.
If, however, we are right and this Order does show itself to be bad and to bring about great hardship and deprivation among important sections of the community, the Minister will be condemned, and rightly so, for having introduced an unfair and an ill-conceived scheme.
11.11 p.m.
The Minister of Fuel and Power (Mr. Aubrey Jones): May I, first, express my appreciation of the manner in which the hon. Member for Bolsover (Mr. Neal) opened the debate and, indeed, the manner in which the debate has been conducted. The hon. Gentleman said that we were all concerned to ensure that the scheme was conducted in the best possible way. He asked me to accept his criticisms, and the criticisms of everybody else, as being offered to me in that spirit. I do accept them as being offered in that spirit, and I trust that I can respond in the same spirit.
184
Whether I can answer every point raised in the debate, I doubt; I do not think that it is humanly possible to do it. Indeed, some of the points, although not very many, concern my right hon. Friend the Minister of Transport more than myself. I promise, however, that in the calm of the morrow, full consideration will be given both by my right hon. Friend and myself to all the points which have been raised.
It has been said—I think, rather ruefully—that in this context we are now all rationers. That is regrettable but it is inevitable. No rationing scheme is perfect. All the injustices that have been pleaded this evening are to some extent inevitable. One cannot really get true justice in this world anyhow, and one probably gets further away from exact justice under a rationing scheme than under any other arrangement. The real question is whether this scheme is as fair and as practicable as it is possible to make it and whether it has the proper balance of fairness and practicability.
Before I endeavour to answer that question, which is the real question before the House, I think it would be helpful if I sketched in some of the background to the scheme. There has been a certain tendency in the country—more in the country, I am afraid, than in the House—to compare people's lot under this scheme with their lot under the old scheme. I think it was the hon. Member for Paddington, North (Mr. Parkin) who said that no such comparison is valid.
In several respects, the situation in which this scheme is being introduced is vastly different from the situation obtaining under and relevant to the old scheme. For one thing, motor transport looms much more largely in the life of the country now than it did fifteen years ago. The number of motor cars has doubled and I believe that the number of commercial vehicles has increased by one-third. We are, all of us, much more dependent on motoring than we were at the time of the old scheme.
Not only that, but the nature of the cut which is necessary now is much more severe than was necessary last time. When the last rationing scheme was introduced at the very beginning of the war, in September, 1939, it was done because of the fear of the effect that submarine warfare might have on the supplies of oil

185
reaching this country. In fact, however, in the early years of the war, even in the dark days of 1940, oil was plentiful and relatively easy to come by. At the end of the scheme in 1950–51, the amount of petrol being saved by the rationing scheme was not much more than 5 per cent., at most between 5 and 10 per cent. On this occasion we have had to stage a much more severe reduction; one of 25 per cent.
I have been asked by several hon. Members to be frank with the House and to give the truth. I trust that I am always thought to do that, and the situation is as I have always described it. The drop in the supplies of oil reaching this country amounts to just under 40 per cent. When this scheme was introduced it was estimated that a proportion of our supplies might come from the Western Hemisphere and that the 40 per cent. fall might be offset to some extent by Western supplies. Hon. Members ask, to what extent? We estimated that it would be about 15 per cent., and the announcement made subsequently in Washington makes no difference to that calculation. Rather, it merely confirms our estimate. The extent of the cut required is, therefore, 25 per cent.
Next, I have been asked by other hon. Members to say if I am reasonably satisfied that the cut in petrol supplies will not have to be made more severe. The answer is that I am. In the light of the American statements, I think I can tell the House that I consider it reasonable to anticipate that the restriction in petrol will not be made more severe.
I think it was the hon. Member for Bolsover—it may have been another hon. Member—who referred to a report in the Press, purporting to have been something which I had said at a Press conference, to the effect that I was warning the country that much more severe restrictions would have to come about. I have never said that in connection with petrol; but I have said it in reference to fuel oil; and to debate that would be outside the scope of the Order which is now before us. What I can say is that, to spare industry every possible inconvenience at present, the restriction in fuel oil was made deliberately light. It was a 10 per cent. cut, but I do not say that it may not have to be made more severe, and if it has to he, then I will pay due regard
186
to the injunction of the hon. Member for Shoreditch and Finsbury (Mr. Collins) that industry should be given the appropriate knowledge as soon as is possible.
Mr. Callaghan: Could the Minister tell us about this 15 per cent. which we expect from the Caribbean out of the total cut of 40 per cent.? Is the 15 per cent. based on the amount which America can supply to us, or by the amount of dollars which we can set aside for the purchase of oil?
Mr. Jones: No; it is limited by the amount which the Americans can supply.
Mr. Callaghan: How much will it cost?
Mr. Jones: I am afraid that I cannot answer that offhand, but I will confer with the hon. Gentleman later.
I should like just to say a word about the background of this scheme, compared with the previous rationing system. The present scheme has had to be applied abruptly, and not entered into gradually, as at the beginning of the last war. We are all rationed now, and we ought all to be conscious of it; but every rationing scheme at its inception has to apply a broad brush. It has to group all petrol users by the broadest categories and then, as time goes on, it becomes possible for it to become more refined. At the inception of the last scheme there was a system of broad classification, followed by an enormous superstructure of special allowances; but one cannot begin a rationing scheme by indicating a lot of special needs. Those have to be grouped into various broad categories.
Finally—I trust the House will not regard this as an irrelevant difference between this scheme and the old one—we hope—I hope I shall not be accused of complacency in saying this—that this scheme will be a short-lived one, a matter of months rather than years—and if it is to be short-lived, it would not be possible, even if it were desirable, to have quite the same degree of refinement as was appropriate last time.
Those are the basic facts lying at the back of the scheme. In the light of them, I should like to reply to some of the criticisms which have been uttered. The criticisms, so far as I have understood them, have fallen into two groups; first, relating to the timing of the scheme, and,

187
secondly, relating to the distribution, as between different groups of users.
First, I will deal with the timing. The hon. Member for Bolsover began, and the right hon. Member for Vauxhall (Mr. G. R. Strauss) concluded, by saying that the scheme should have begun earlier, but there was a contradiction in their thought. Although they said that the scheme should have been begun earlier, they also said that there should be far more detailed supplementary allowances and that the order of priorities should be far more scrupulously arranged. We cannot both have our cake and eat it. If the object is to start the scheme as quickly as possible, one must cut down the number of supplementary applications which one is asking people to submit. On the other hand, the greater the number of supplementary applications that one is allowing, the greater the delays.
The time taken was just over three weeks, the same time as for the former scheme, although there are now double the number of cars on the roads. That time was necessary so that the ration books could be issued and so that, above all, priority supplementary applications for doctors, nurses, etc. could be considered.
It was doubtful whether, in the time available, all the intermediate priorities could be considered. It was because of that that the coupons were made interchangeable. It was because of that that it was made perfectly lawful for a man to draw his petrol for the whole four months right at the beginning. Pending a scrutiny of his application for a supplementary allowance, he could anticipate, to some extent, the future. Again, this was an inevitable result of the relatively quick introduction of the scheme.
In passing, I wish to comment on one remark by the right hon. Member for Vauxhall. He was in error in saying that the coupons were interchangeable forwards but not backwards.
I now come to the second group of criticisms, those dealing with the distribution of petrol between different categories of user. Time after time tonight the cry has been raised that the scheme deals too leniently with the pleasure motorist. I should have been delighted had I been able to identify the pleasure
188
motorists, tie them up neatly into a parcel, see exactly how much petrol they consumed, and then supply all the rest to industry.
I am afraid that the so-called pleasure motorist, pure and simple, is not so very easy to identify. Of the petrol used in this country, 80 per cent, is used by cars employed for business and professional purposes. We are left with 20 per cent. Nobody is going to tell me that the whole of that 20 per cent. is used entirely for pleasure motoring. It is used, as most of us use it, for a substratum of essential purposes, but on top of that people indulge in their little pleasures.
The basic ration of 200 miles a month was fixed so that people could cover those essential purposes with none left for pleasure. I think that the misunderstanding has arisen partly from the comparison which people unconsciously make between this and the last scheme. Under the last scheme, the basic ration was 90 miles a month, and in the case of the private motorists that was eked out by all kinds of special allowances—taking a child to school; taking a grandmother to church on Sunday; going to work and so forth. If this scheme was to begin quickly, all those special allowances had to be cut out, and the figure of 200 miles a month was fixed as being most compatible with the exclusion of those other things.
Then I come to business and commercial travellers. Again I repeat that if the scheme was to begin quickly, it had to be relatively simple. It was therefore left to business itself to determine certain priorities within business. For instance, in general a firm will have for all its cars the equivalent of about 300 miles a month. How the firm distributes its block allocation, as it is called, between commercial travellers on the one hand and works managers on the other, that firm itself is in the best position to decide. If, however, the size of the block allocation to a firm affects its production—if the firm can establish a good case showing that production and employment are adversely affected, special consideration will be given to that case.
Then I come to the manufacturing agent, the self-employed man. Once again I must say that it is hoped that the scheme will be short-lived. The country's whole economy is not geared to great war

189
operations as last time. It is reasonable, therefore, where the livelihood of a self-employed person is affected, as with the production of a firm, that special consideration should be given. Where commercial travellers fall into this special category—the special group of cases where livelihood is affected—consideration will be given to them straight away through the regional petroleum officers.
I should like to say that I was very much impressed by the complaints voiced throughout today, both at Question Time and in the debate, about taxis. My difficulty has been in ascertaining the full facts—the mileages of provincial taxi drivers, etc. However, I will take into account the criticisms made today, and I hope to make an announcement of one kind or another in a few days' time—before the end of the week.
Time does not allow me now to deal with many more of the issues raised. I have thought the debate extremely valuable and I have learned much from it. The scheme is not fixed for all time, and as time goes on we hope to smooth and soften its edges. In that process I shall pay due regard to what I have heard throughout the debate.
Mr. G. R. Strauss: Will the Minister answer my question about the extraordinary paragraph 8?
Mr. Jones: Paragraph 8 refers not to the private motorist but to, for instance, the farmer who banks his petrol coupons with a garage and draws them over a period of time.
Mr. Neal: I beg to ask leave to withdraw the Motion.
Motion, by leave, withdrawn.

TYNE TUNNEL
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Godber.]
11.29 p.m.
Mr. E. Fernyhough: I am sorry to keep the Joint Parliamentary Secretary to the Ministry of Transport here at this time of night, but he will appreciate that this problem is one with which he is not unacquainted. For years there has been talk of a link between the two banks of the Tyne, and after many conferences, deputations and discussions, it was ultimately decided that the best method by which this could be brought about was a tunnel. Plans were made and approved, and in 1947 the first part of the project was started, namely, the pedestrian tunnel. That is completed, and it has been a boon to many of the workers who have to work on the opposite side of the river to that on which they live.
Due to the country's economic position, the major development scheme was delayed. Always we were assured, by one Minister of Transport after another, that as and when the economic position improved the plans for the tunnel would be allowed to go ahead. Always we were assured also that the Tyne tunnel would keep its place in the queue of major projects. When the right hon. Gentleman who is now the Colonial Secretary was Minister of Transport a deputation of northern Members went to see him. At that time we were given to understand that the Tyne tunnel project was third on the list. I believe that the first was the Dartford tunnel and the second the Whiteinch tunnel.
In August, 1955, there was a meeting in Newcastle, at which the right hon. Gentleman who is now Minister of Pensions and National Insurance, in his then capacity as Minister of Transport, threw out a proposition which came as a bombshell. He said that he would like to consider proceeding not with a tunnel but a bridge. He gave as his reasons the fact that a bridge would be cheaper to construct than a tunnel; furthermore, that it would be speedier to build; and also that there was a greater chance of building it.

191
Argument has gone on whether there should be a tunnel or a bridge. A bridge would be less costly, but there are certainly many distinct disadvantages connected with it. Although we understand that the Admiralty has no objections to a bridge from a strategic point of view, many of the interests connected with the Tyne are very doubtful about a bridge being as serviceable as a tunnel. What we are now very concerned about is the fact that the Minister of Transport has recently been thinking aloud and saying things which might mean that there was going to be an innovation in respect of tolls. I would like to tell the Parliamentary Secretary that before those thoughts are turned into concrete facts he might consider the fact that such suggestions slow up traffic.
You will understand, Mr. Deputy-Speaker, that I cannot go into too much detail upon this matter, but it is quite true to say that no Minister of Transport should, at this time, be contemplating the introduction of any innovation or change which will add to the number of people in administrative posts. What we require is as many people as possible engaged in productive work. Anything which tends to add to the number of administrative workers and, at the same time, tends to slow up traffic, is something which, in 1956, ought not to be contemplated.
I should like the Joint Parliamentary Secretary to understand what is happening in my constituency. The pedestrian tunnel is completed, and is a great boon. All the plans were made on the basis that there would be a tunnel and not a bridge. Jarrow Corporation has made its plans on that basis, and the county council has acquired houses and land on the same assumption. Until the matter is finalised—we hope on the basis of a tunnel—all the local authority efforts to plan properly a town which, like Topsy, "just grow'd", become nonsense.
I think that the Joint Parliamentary Secretary would agree that the North-East has been patient. I recognise that the patience has to be extended further because, in present circumstances, it would need very violent argument on the part of the Minister of Transport and the Joint Parliamentary Secretary be
192
fore the Chancellor would give the "Go ahead" to projects of this nature. But
"Hope springs eternal in the human breast"
and so I would like the Joint Parliamentary Secretary to give us hope tonight by assuring us that the Tyne tunnel still retains its place in the queue, still comes after Dartford and Whiteinch.
The Joint Parliamentary Secretary must know that Tyneside is one of the most productive areas in the country, and that as much of the essential work of the country is done there as in any two counties. It is where great contributions have been made to Britain's economic survival and recovery. What a boon and a blessing a Tyne tunnel would be. I ask for some assurance that the job will be started soon and that the Minister will grant us the tunnel as originally planned, and not a bridge. This is what most people on Tyneside would like best.
11.39 p.m.
The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Hugh Molson): I have listened to the hon. Member for Jarrow (Mr. Fernyhough) speaking about this project, which has been brought to the attention of the Ministry at frequent intervals for certainly the last three years.
I remember my embarrassment on what I think was literally the eve of the pronouncement by my right hon. Friend who is now the Colonial Secretary of a new programme of road construction. That was in December, 1953. I had had to receive on the previous day a deputation from Tyneside which stressed the urgency of this tunnel. I was, of course, not able to tell them what the position was, and I felt very much the fact that I was unable to divulge to them that in the announcement to be made the following day, the tunnel would not be included.
Since this idea was originally put forward, the cost has unfortunately increased very much indeed. At the present time the cost of a tunnel under the Tyne would be not less than £10 million or £11 million. It was for that reason that the present Minister of Pensions and National Insurance, when he saw the Tyne Tunnel Joint Committee in 1955, referred to the possibility of there being a bridge in place of a tunnel, and discussed the possibility of levying tolls to meet the very heavy cost involved.

193
I believe that on 14th December, 1955, the Committee replied that it was unable to make any recommendation to the two county councils concerned, but that while it appreciated that tolls might warrant consideration in the case of a tunnel because of the high capital cost, it was unable to find reasons to justify a new toll bridge across the Tyne, in view of the fact that a number of bridges across the river had recently been freed from tolls.
There have been no further exchanges on the subject for some time, except that the Committee, I believe, has expressed the wish to come and discuss the matter with the Minister. The speech which we have heard from the hon. Member for Jarrow tonight rather suggests that the Committee will probably express the local opinion in favour of a tunnel rather than a bridge. I am afraid that the fact that it desires a tunnel, at a cost which, as I have mentioned, is nearly double that of a bridge, makes it more difficult for the Minister to agree to this project at any time in the near future
As the hon. Gentleman is aware, we are at present engaged in carrying out the programme which was announced by the present Minister of Pensions and National Insurance and which involves the authorisation of £147 million of new expenditure in the space of four years. It was not possible to include the Tyne tunnel in that programme, and I am afraid that there has since been an increase in costs generally, and it is not possible for me tonight to indicate when this project can be authorised. I can assure the hon. Gentleman and other hon. Members who represent the people living on the banks of the Tyne, that we do fully realise how necessary it is for some relief
194
to be provided for that area, and to improve the communications between the two banks of that important industrial river.
Mr. Fernyhough: I wish to put two points to the right hon. Gentleman before he sits down. Can he tell me whether we are to retain our place in the queue? Secondly, can he tell me whether, in the statement the Minister made about tolls in July, the last part would apply in the case of the Tyne project? The statement said: "The plans which have already been sanctioned will not it is understood be affected by the new rule." Since the Tyne tunnel was a project which had been sanctioned from the point of view of planning, can the right hon. Gentleman say whether it would be exempted?
Mr. Molson: In reply to the first point, while I do not wish to give any new promise tonight, I think that the order of priority was indicated, as the hon. Member said, which suggested that the Tyne tunnel would be the next tunnel undertaken in this country. There is at present no intention to depart from anything that has been said on that subject in the past.
With reference to the second point, what my right hon. Friend said to the National Production Advisory Council for Industry on 20th July, 1956, was that no new schemes for expensive bridges or tunnels would be authorised except as tolls projects. In view of the fact that the Tyne tunnel has not been authorised it would appear to me to fall within the scope of what he then announced.
Question put and agreed to.
Adjourned accordingly at a quarter to Twelve o'clock.

PENSIONS AND NATIONAL INSURANCE
  Ex-Prisoners of War, Japan (Compensation)
  Ex-Prisoners of War, Japan (Compensation)
  Old-Age Pensioners' Association, Woolwich
  Old-Age Pensioners' Association, Woolwich
  National Insurance Act (Compliance)
  National Insurance Act (Compliance)
FUEL AND POWER
  Motor Fuel Rationing
  Motor Fuel Rationing
  Coal Mining (Subsidence Damage)
  Coal Mining (Subsidence Damage)
  Lubricating Oil
  Lubricating Oil
  Paraffin (Supplies)
  Paraffin (Supplies)
  Gas Industry (Ex-Municipal Employees)
  Gas Industry (Ex-Municipal Employees)
ELECTRICITY
  Members of Boards (Salaries)
  Members of Boards (Salaries)
  Boards (Retail Trading Accounts)
  Boards (Retail Trading Accounts)
MINISTRY OF SUPPLY
  Swift Aircraft
  Swift Aircraft
  Chemical Inspectorate (Sandwich Courses)
  Chemical Inspectorate (Sandwich Courses)
AGRICULTURE, FISHERIES AND FOOD
  Farm Buildings (Improvement Grants)
  Farm Buildings (Improvement Grants)
  Bread (Price)
  Bread (Price)
  Fish Prices
  Fish Prices
  Beef (Retail Prices)
  Beef (Retail Prices)
  Unmarked Eggs (Sale)
  Unmarked Eggs (Sale)
  Eggs and Poultry Division (Cost)
  Eggs and Poultry Division (Cost)
  Agricultural Marketing Acts (Consumers' Committees)
  Agricultural Marketing Acts (Consumers' Committees)
  Fixed Equipment (Fencing)
  Fixed Equipment (Fencing)
  Agricultural Research, Wales (Sub-Committee)
  Agricultural Research, Wales (Sub-Committee)
MINISTRY OF HEALTH
  Chiropody Facilities (Old People)
  Chiropody Facilities (Old People)
  Leukaemia
  Leukaemia
  Prescription Forms (Pensioners)
  Prescription Forms (Pensioners)
  Mass Radiography (Hungarian Refugees)
  Mass Radiography (Hungarian Refugees)
  Chronic Bronchitis
  Chronic Bronchitis
  Foot Health (Rubber Footwear)
  Foot Health (Rubber Footwear)
HOSPITALS
  Demolished Houses (Alternative Accommodation)
  Demolished Houses (Alternative Accommodation)
  Homeless Disabled Men
  Homeless Disabled Men
MEDICAL RESEARCH
  Leukaemia
  Leukaemia
  NORTH VIETNAM (HUMAN RIGHTS)
  NORTH VIETNAM (HUMAN RIGHTS)
  OVERSEAS INFORMATION OFFICERS
  OVERSEAS INFORMATION OFFICERS
  B.B.C. AND FOREIGN OFFICE (CONSULTATION)
  B.B.C. AND FOREIGN OFFICE (CONSULTATION)
  SYRIA (SUPPLY OF ARMS)
  SYRIA (SUPPLY OF ARMS)
  TURKEY (EXCHANGE OF VIEWS)
  TURKEY (EXCHANGE OF VIEWS)
  U.N. SECURITY COUNCIL (BRITISH REPRESENTATIVE'S SPEECHES)
  U.N. SECURITY COUNCIL (BRITISH REPRESENTATIVE'S SPEECHES)
  MRS. RICHARDSON (SPECIAL BILL OF INDICTMENT)
  MRS. RICHARDSON (SPECIAL BILL OF INDICTMENT)
ROYAL AIR FORCE
  Operations, Egypt (Aircraft)
  Operations, Egypt (Aircraft)
TRANSPORT
  Oil Tankers
  Oil Tankers
  Goods Vehicles (Supplementary Fuel Ration)
  Goods Vehicles (Supplementary Fuel Ration)
  Public Transport Services (Industrial Centres)
  Public Transport Services (Industrial Centres)
  Provisional Licences
  Provisional Licences
ROADS
  Tempsford and Stibbington (Dual Carriageways)
  Tempsford and Stibbington (Dual Carriageways)
SCOTLAND
  New Electricity Plant, Barony
  New Electricity Plant, Barony
  Institution For Mental Defectives, Carstairs
  Institution For Mental Defectives, Carstairs
MINISTRY OF DEFENCE
  Forces, Egypt (Oil Fuel)
  Forces, Egypt (Oil Fuel)
  Manpower (Returns)
  Manpower (Returns)
NATIONAL FINANCE
  £ Sterling (Value)
  £ Sterling (Value)
TRADE AND COMMERCE
  Drugs and Pharmaceutical Preparations (Prices)
  Drugs and Pharmaceutical Preparations (Prices)