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Fourth Schedule—(Purchase Tax;Supplementary Provisions As To Road Vehicle Chassis And Road Vehicles)

Volume 477: debated on Tuesday 4 July 1950

The text on this page has been created from Hansard archive content, it may contain typographical errors.

I beg to move in page 50, line 3, at beginning, to insert "Agricultural, horticultural."

This amendment together with the three following amendments to page 50, line 3, have the effect of extending to all agricultural and horticultural trucks designed primarily for use on farms the same exemption from Purchase Tax already granted by the Bill to industrial and works trucks for use in warehouses, docks and so forth. I believe it carries out the purposes of the Government which are not carried out by the Bill In the earlier discussion the Government extended the exemption to the Land Rover, not out of solicitude for a particular vehicle but because it fulfilled certain criteria. The Financial Secretary to the Treasury said then that they were granting exemption because, although it was a light vehicle, it was designed mainly for use on roads, farms and rough ground. He said that the Government thought that these vehicles could reasonably be distinguished from ordinary road vehicles for the purposes of this tax.

If it is for that reason that the Land Rover is to be exempt, surely it should be understood that any other vehicles which meet that criteria should also be exempt; but when we turn to the Amendment already inserted in the Bill at an earlier stage, we find that it is so drawn that exemption extends only to the Land Rover, which is the only vehicle I know driven through all road wheels. At an earlier stage I pointed out to the Financial Secretary that the Amendment already in the Bill does not go to the extent of exempting all vehicles falling within the criteria the Government have adopted. His reply was that further amendment did not appear to the Government to be necessary because they thought they had already exempted all vehicles used mainly on farms.

They cannot, however, be certain that by exempting a specific vehicle of the Land Rover type they are exempting all vehicles falling within a certain category, because there may be other vehicles designed in future and put on the market which will fall within that category and which will not be exempt under the very narrow drafting of the amendment in the Bill. I have supplied the Financial Secretary with the example of a vehicle constructed in a factory in my own division, designed primarily for use on farms, 95 per cent. of which are sold for use on farms. It is a light three-wheeled vehicle with a maximum speed of 12 m.p.h., and in my submission is much less likely to be used on the roads in substitution for a normal road vehicle than is the Land Rover.

It seems to me, therefore, that if the Government carry out the attitude they have set out in their statements, if they wish to fulfil the intention of exempting from Purchase Tax not only industrial trucks designed for use in factories but also agricultural trucks designed for use on farms, they will not rest content with the Bill as it stands but will accept my Amendment.

I think the hon. Member for Barnet(Mr. Maudling)has the same object we ourselves have in this instance. It is true I undertook in Committee that if it turned out that there were other vehicles which fell into the same general category as the Land Rover, that is to say, were predominantly for use and were used on farms and woodlands rather than on roads, we should wish to exempt them in the same way.

The hon. Gentleman has supplied us with particulars of the vehicle he has in mind, which is known as the Motocart. However, so far we are not satisfied that it falls into the same category for this purpose as the Land Rover. I believe there are certain versions of this vehicle which are usable, for instance, for building work on building sites and for ordinary retail delivery purposes.

The standard version of the Motocart is described by the manufacturers themselves in their advertising material as "an all-purpose mechanical cart." That in itself rather suggests it is for general use on the roads. However, it is still open to the makers of this vehicle, if evidence can be supplied, to prove their case, and if it were proved we would of course grant the exemption, if necessary by an order in the usual way.

11.30 p.m.

I am sorry to interrupt the hon. Gentleman, but he says that if the Government are satisfied that there were vehicles primarily designed for this purpose, they would accept an Amendment of this kind, but that if there were no such vehicles, there would he no reason for accepting it. I am afraid I do not quite follow his argument.

The Land Rover is not exempted eo nomine; it is exempted by a formula contained in the Bill. If it were proved that there were other vehicles, within the spirit of our intentions but not within the formula, then we would consider them for exemption.

I fear that I have difficulty in following the logic of this argument. The Financial Secretary says that the Land Rover is included, for a certain reason. The reason in the Bill is that it is a

"wheeled vehicle which drives through all road wheels and is of less than 30 cwt. unladen weight."
There is no particular magic in that description. The hon. Gentleman intended to exclude it because, being designed in that way, it was peculiarly suited for use on farms rather than on roads. That was the reason. It was a reason for which it was, in fact, exempted. If I am wrong I shall willingly give way in the hope that the hon. Gentleman will correct me. He does not correct me; so, we have arrived at the position at which the Government were prepared to exempt a vehicle which was peculiarly designed for the uses of agriculture.

The point which we are trying to put from this side of the House is this. There are several vehicles peculiarly suited for agricultural purposes. It does not matter if that vehicle happens to have a four-wheel drive; there are all sorts of circumstances which suit a truck for agricultural purposes, and some of these vehicles are designed and, no doubt, others will be designed in the future, for this purpose. I therefore fail to understand why the Government resist the idea that any vehicle, provided it is primarily designed for agricultural purposes, should be exempted.

That is surely the purpose which the Government have in mind and we have, quite reasonably we believe, put this idea into words and are trying to incorporate it in the Bill. When we were discussing this matter the other day, the hon. Gentleman said it did not appear that this Amendment was necessary because the intention of the Government had been that all vehicles used mainly on farms should be exempt. Well, then, why not say so in the Bill? That would get over this sort of difficulty. If it was in the Bill, it could be decided by the manufacturer whether his vehicle was in that category or not.

The hon. Gentleman went on to speak about lorries and vans which were "general road vehicles." Well, put that in the Bill, and then the maker can say whether it is exempt, or the matter can be finally decided by the appropriate tribunal. That is a very reasonable approach, it seems to us, to this matter. This is the test which I think the Government have sought to apply to their arguments made previously on this matter.

Can the Financial Secretary say, shortly, what is the taxation basis of the combine harvester? It is an agricultural vehicle. It is mechanically propelled. It is a road vehicle in a sense that it goes upon roads, and it also is a vehicle constructed or adapted for the carriage of a burden of some description, namely, sacks of corn, which stand on the platform during its travels through the cornfields. That seems to me to be a vehicle like the trucks mentioned. It reinforces my hon. Friend's arguments for a wider definition to this Clause so that agricultural vehicles as well as vehicles used in yards and docks and elsewhere should be included. I suspect the Government, after the speech of the hon. Gentleman the Member for Wednesbury (Mr. S. N. Evans), are very anxious not to "feather-bed" the agricultural industry any more. We on this side of the House consider it should be put, in respect of commercial vehicles, exactly on all fours with industry.

Amendment negatived.

I beg to move, in page 50, line 3, to leave out "trucks" and insert "and refuelling vehicles."

During the Committee stage of this Bill, I moved an Amendment designed to clarify the position regarding aircraft refuelling vehicles, and had an assurance from the Chancellor which was satisfactory as far as it went. Nevertheless the silent Member for Salford, West (Mr. Royle) saw fit to come into my Division and poke fun at the work I was trying to do on the Committee stage of this Bill. I hope he will listen to me now, for I shall show that the discussion was not only worth while, but requires further clarification now. [Interruption.]

I will gladly give way to the hon. Member for Salford, West, if he wishes. My contention that aircraft refuelling vehicles should be specifically excluded from the Schedule was said to be unnecessary by the Chancellor of the Exchequer because they were not road vehicles. I have myself pointed out that many of these bowsers, as they are colloquially called, are too big to travel on the road. The important point is that there are a number of smaller aircraft refuelling vehicles which could travel on roads as part of their duty. The purpose of the two Amendments standing in my name—and I imagine, Sir, you will like the two to be taken together—is to ensure that all aircraft refuelling vehicles designed primarily for the refuelling of aircraft are excluded from the operations of the tax and are completely exempt. The two Amendments both relate to paragraph (e). The first one inserts the phrase "and refuelling vehicles" after the word "trucks," because they are plainly not industrial or works trucks. and the second Amendment states "airfields" as a place of operation as distinct from factories, docks, yards, and the other places of operation mentioned in the paragraph.

Here again, I think there is really no difference of purpose, but we do not consider it is necessary to accept these Amendments in order to achieve what we have in mind. The answer to the hon. Gentleman's argument is this. Either these aircraft refuelling vehicles are not used on the road, in which case a given type of vehicle will, of course, not be taxable under the Bill as it now stands—that would have to be established in the case of a given type—or, alternatively, if they are usable and used on the roads there is really no reason why they should be exempt from tax any more than other veihicles carrying bulk liquids, like milk or petrol. Therefore it seems to us that the right procedure is for the decision to be taken administratively in the light of the characteristics of the individual type of vehicle, and not for any further alteration to be made in the terms of the Bill.

I am increasingly puzzled by the arguments which the Financial Secretary is addressing to the House. I should have thought that the one test which could not be correct was the one he is now applying. Whatever else is true about this Clause, it is that it is not the use of the vehicle which is the test as to whether it is taxable. The test surely must be whether it is designed finally for use somewhere or somewhere else. Our discussions would be much helped if the Financial Secretary would say what, in his view, is the definition of a road vehicle. Is it something which could be used in any circumstances upon the road —in which case a combine harvester would probably be included—or is the test whether it is mainly designed for a particular purpose?

If we could have an answer upon that point it would ease our minds on quite a number of these Amendments. At the moment no answer has been given, but I am satisfied that the test which the Financial Secretary has just given to the House could not conceivably be the right one in any circumstances. It is not the use of the vehicle in any circumstances; otherwise tax could be evaded straight away simply by giving an undertaking that the vehicle was not used beyond the confines of the farm or beyond the confines of the aerodrome. Would the Financial Secretary pay us the courtesy of answering this point? What is the test of a road vehicle? Is it one that is mainly designed for use upon the road or is it one of which the use could be on the road but is generally for other purposes?

The definition is a vehicle which is adapted for use on the roads, and some of these refuelling vehicles are adapted and some are not. A great many are not adapted because they do not comply with the regulations that are necessary for tank vehicles carrying petrol which run on roads, but they are allowed to be used within aerodromes. That is one classification. The other classification deals with the ordinary petrol vehicles that go about the roads and into aerodromes. If the hon. Member is dealing with the ones that are used on airfields, they are not of a category that are adaptable to be used on the roads because they do not comply with the regulations that are necessary for those vehicles on the roads.

I want to get it quite clear because it is important to quite a lot of people. Do I understand the right hon. and learned Gentleman to say that any vehicles which fall within the requirements laid down by Parliament for permission to go upon a road at all—that is, a petrol-driven vehicle which is adapted for the purpose of travelling on a road, even between one farm and another—would fall within the mischief of the Clause?

If it is not excluded by the words in the Schedule dealing with the various exclusions or with the one mentioned by the noble Lord which is not mechanically propelled but is drawn by something else.

11.45 p.m.

May I, by leave of the House, say that the Chancellor is quite wrong. I do not think he has ever seen a combine harvester in his life. The thing is all of one piece—the engine and platform on which the sacks of corn are laid and the cutters and chute and all the weird and wonderful devices. I ask the right hon. and learned Gentleman to have a look at one, otherwise the farming community will be very distressed.

Amendment negatived.

I beg to move, in page 50, line 29, to leave out from "vehicles" to the end of line 36, and to insert:

"of the following description, that is to say:—road vehicles constructed or adapted for use for the carriage or haulage of goods or burden of any description not forming part of the vehicle or necessary for its propulsion or equipment, being either mechanically propelled vehicles or vehicles designed for use as components of a composite vehicle which is mechanically propelled, and not being vehicles in respect of which purchase tax has become chargeable nor vehicles of the kinds mentioned in paragraphs (b), (c), (d), (e) and (h) of subparagraph (2) of paragraph 3 of Part I of this Schedule;
but applies to a vehicle of that description only where purchase tax would have become chargeable in respect of it if vehicles of that description had been made chargeable goods as from the first day of May, nineteen hundred and fifty.
(2) Any reference in this Part of this Schedule to a prospective liability by virtue of this Act to purchase tax shall be taken as a reference to a prospective liability to purchase tax arising from the charge of purchase tax on certain vehicles which was provided for by a resolution passed by the Committee of Ways and Means of the House of Commons on budget day."
This is really in the nature of a drafting Amendment and it is proffered because hon. Members felt that the drafting of paragraph I (1, b) was not satisfactory in that it referred to the Bill as presented in its original form. We have changed that by setting out the vehicles and that, I think, cures the drafting defect to which the hon. and learned Member for Kensington, South (Sir P. Spens) drew attention.

Question, "That the words proposed to be left out stand part of the Bill," put and negatived.

Question proposed, "That the proposed words be there inserted in the Bill."

I beg to move, as an Amendment to the proposed Amendment, in sub-paragraph (2), to leave out "a" [" by a resolution 1, and to insert "the following."

I agree that the words which have just been proposed are a great improvement on the words in lines 29 to 36 which were in the Bill before this Amendment was moved. But the new words have one defect to cure which I move an Amendment which, I hope, the Government will accept to make the thing better still. The great objection to the words that have gone was the extraordinary difficulties which would have been placed on anyone who sought to understand the Government's legislation. It would be intolerable to try to find out what the law would have been if the Bill as originally presented had been passed without amendment. That has now gone, but we still have a reference which would put any practitioner or member of the public in difficulty unles we provided a small further amendment such as I suggest.

I ask the Chancellor of the Exchequer, or any person interested in legislation passed by this House, what the practitioner, or anyone wishing to know what was meant by the new words in the Solicitor-General's Amendment, is supposed to do. No reference to any Statute Book would do any good, because the Resolution would not be found in the Statute Book. They are not even told what Budget Day was in that particular year. If they were told and looked up HANSARD, if they were able to find HANSARD, we have heard from Mr. Speaker that HANSARD is not an authority. I suppose they would have to send some reliable person to try to search the Journals of the House. It cannot be the object of the Chancellor of the Exchequer to cause all these difficulties to people who wish to understand this legislation, unless there is some undisclosed reason for it. In my second Amendment I propose to set out what the relevant Resolution was. I am confident that the Chancellor will accept this most reasonable proposal.

I beg to second the Amendment to the proposed Amendment. This is a theme which warrants a lengthy oration, hut, in all the circumstances, I formally second.

I really think it is going too far to say that this is going to put practitioners in any difficulty. The original Schedule enacted this particular provision in four lines. In deference to the views of hon. Members, those four lines were expanded into about 21 lines. Now the hon. and learned Gentleman the Member for Norwich, South (Mr. H. Strauss) wants to expand it by another 10 to 15 lines.

Because it is really unnecessary. I do not think any practitioner would feel that he was in any difficulty about it. The hon. and learned Gentleman made a great point about the difficulty that arises because nobody would know when Budget day was, but if the doubtful practitioner would cast his eyes three or four lines down the page he would find it defined. It is defined in the next paragraph, and, therefore, the inexpert practitioner, if he is paying any attention to what he is trying to construe and takes the trouble to read a few lines down, would have no difficulty, because he would see that the expression "Budget day" means the 18th day of April, 1950. That is quite simple, and I feel that any practitioner would understand that. To say that any practitioner is going to he in serious difficulties is using quite exaggerated terms, and I feel we could not accept the Amendment proposed by the hon. and learned Gentleman.

May I by leave of the House put a point to the right hon. and learned Gentleman?

Amendment to the proposed Amendment negatived.

Proposed words there inserted in the Bill.