HC Deb 27 May 1968 vol 765 cc167-8W
Mrs. Thatcher

asked the Chancellor of the Exchequer (1) why the administrative practice under Section 6(1) and (2) of the Finance Act, 1964 has been changed to exclude from hydrocarbon oil duty relief on certain oils which have hitherto been eligible for that relief;

(2) to what extent was prior notice given to industry of the exclusion from relief of certain hydrocarbon oil duties previously eligible under section 6(1) and (2) of the Finance Act 1964; and what consultations took place.

Mr. Harold Lever

Legal advice showed that in some cases relief from duty under this Section had been allowed where it was not authorised by law.

Prior notice was given to suppliers and industrial users of oil by the issue of an explanatory memorandum. Local Officers of Customs and Excise explained the change in person to industrial users whose eligibility for duty-free use of oil appeared likely to be affected. There were consultations centrally with representatives of certain industries affected by the change.

Mrs. Thatcher

asked the Chancellor of the Exchequer (1) what estimate he has made of the increased primary costs to industry arising from the exclusion of metal-working oils from hydrocarbon oil duty relief.

(2) what estimate he has made of the increased, revenue resulting from the decision to restrict hydrocarbon oil relief under section 6(1) and (2) of the Finance Act 1964 to those oils which enter physically into the composition of the finished article.

Mr. Harold Lever

Relief from oil duty under this Section is not confined to oil which enters physically into the composition of a finished article; it applies also to oil used as a solvent, extractant, preservative or finish in the manufacture or preparation of the article. Under the recent change in practice, relief to the extent of £400,000 a year has been withdrawn, but new relief to the extent of £170,000 a year has been allowed, and the net annual additional revenue is thus just under £¼ million.

The loss of relief on metal-working oils as such is not known, but on oils of all kinds used in the metal manufacturing industries it is estimated at about £100,000 a year.