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Orders Of The Day

Volume 499: debated on Wednesday 30 April 1952

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Finance Bill

Considered in Committee.

[Colonel SIR CHARLES MACANDREW in the Chair]

Clause 1—(Hydrocarbon Oils, Etc)

3.33 p.m.

The first two Amendments on the Order Paper are unduly wide but do not quite amount to negativing the Clause. I shall, therefore, select the first Amendment, on the understanding that when the dozen or so Amendments which are designed to make exceptions are reached, those selected will not be debated at much length. I respectfully remind the Committee that, under Standing Order 45, the Chairman may put forthwith the Question that the Clause stand part if he is of the opinion that the principle of the Clause has been adequately discussed.

I beg to move, in page 1, line 16, to leave out subsection (1).

I take note of what you have said. Sir Charles. It seems to be that it would be to the convenience of both sides of the Committee that we should discuss the first Amendment and should have a general debate on the subject of the petrol tax.

We have put down the Amendment and we mean to press it, because, briefly, in our view the petrol tax, after last year's Budget, had gone high enough, and because it is extraordinary that hon. Members opposite should this year support this further increase after their repeated condemnations of the increases that we made in 1950 and 1951. In particular, the present Leader of the House fulminated at great length last year against the whole idea of raising the petrol tax at all, and I shall quote some of his remarks.

I believe that the increases that we made in 1950 and 1951 were right at the time, on the grounds that I then gave; but for that very reason the tax had gone high enough by last year. Indeed, if the same tax is raised twice in successive years, that in itself is a good reason against further raising it in the third year. It is, at any rate, more consistent and logical to argue that the tax ought to have gone up from 9d. to 1s. 10½d. a gallon, but should not go further, than to argue, as do hon. Members opposite, that it never ought to have gone up from 9d. to 1s. 10½d., but should now go up from 1s. 10½d. to 2s. 6d.

The situation is different this year in several relevant ways. First, in 1950 and 1951 we were maintaining the food subsidies in order to avoid a steep rise in the cost of living. This time, however, the Government at once push up the cost of food by cutting the food subsidies and the cost of fares by raising the petrol tax. There might have been a case—indeed. I said so before the Budget—for raising this tax to provide revenue for maintaining or increasing the food subsidies. But there is absolutely none if a cut is being made in the food subsidies at the same time.

Secondly, there is this difference. In the previous two years we had to provide extra revenue either to cover an inflationary gap or for the sake of re-armament. Indeed, it was mainly for financing rearmament that I argued in favour of a rise in the tax a year ago. But this year, the Government did not have to do that at all, as the Chancellor of the Exchequer himself admits. In our view, the Chancellor need have raised less revenue this year, because he is both indulging in wasteful expenditure, which I will specify, and giving away some revenue unnecessarily.

If the Chancellor of the Exchequer asks where we would obtain the revenue which he intends to get from this tax, the answer is quite clear—and this, incidentally, applies to all our proposals for tax relief and not merely to the petrol tax alone. First, we would not have added £75 or £80 million to the cost of interest paid by the Government, which is largely in addition to the receipts of banks and other lending firms, and is, in our view, quite unnecessary in order to achieve the restriction of credit which we agree to be desirable. We think that the Chancellor should stop wasting this £80 million and should stop putting this extra burden on the taxpayer in order to meet it. Secondly, we do not think that the Chancellor need have given the big tax reliefs in the Budget to people with four-figure incomes and upwards.

Thirdly, whereas until last year the price of petrol was well below the average price abroad—and that was another of the reasons which I gave in support of the increases—the present increase of 7½d. in the tax takes the price of petrol, if anything, rather above the average retail price in other countries. I think it is a perfectly relevant argument to point out that in earlier years petrol was still cheaper here than abroad on the average. At the present price of 4s. 3d. a gallon here after the increase this year, the Government have raised it as high as in a number of European countries and, of course, a long way above that of Australia, New Zealand, South Africa and North America. The average price abroad at the moment, I understand, is 3s. 9d., compared with the 4s. 3d. charged in this country.

But we object most of all to this further steep rise in the tax this year, at a time when food prices have also been forced up by the Government, because this further action by the Chancellor will tend to push up bus fares all over the country. Is it not really rather extraordinary that at one and the same time the Chancellor raises food prices by withdrawing a subsidy, the Prime Minister sallies forth as a champion of cheap transport, and the Chancellor raises fares by pushing up the petrol tax. Perhaps, however, this is not so extraordinary in a Government which has a remarkable record of muddle in every field of administration.

The British Road Federation, which represents a number of road and motoring organisations, thinks that the Tory Party in this matter has rather let it down. The Federation, in a letter to the Chancellor on 26th March, said that as the Conservative Party voted against the previous increases in 1950 and 1951 the Federation "not unreasonably hoped"—those are its words—that it would get some relief on this occasion. Even more pertinent, I think, the Federation goes on to say that the action of the Chancellor in raising this tax was—and I again quote their words:
"patently inconsistent with the concern shown by the Government in its statement of last Friday."
That was the notorious statement from Downing Street, just before the Budget
"disclaiming any responsibility for the increase in the London fares."
Surely we are entitled to ask: "Did the Prime Minister, when he put out this electioneering effort on 7th March, know that the Chancellor was just going to raise the petrol tax? Or alternatively, did the Chancellor, I wonder, know that the Prime Minister was launching this disingenuous statement about fares? Possibly—I do not know—it may have been Lord Cherwell who issued it without consulting the Prime Minister, or the Chancellor, or the Minister of Transport, who, of course, would not have been let into the secret at all. It came, we must remember, from Downing Street. Perhaps the truth is that we now have a Cabinet so overloaded with overlords, including one overlord specifically for public relations, that this sort of chaos is the only thing one could expect.

While the Prime Minister was indulging in these electioneering sorties and posing as a champion of cheap fares, the Chancellor was pushing them up by this tax. For a very high proportion of the extra revenue from this tax will, in fact, be an addition to the cost of omnibus transport, of commercial transport, of agricultural production of one kind and another and of actual outright industrial production in a number of industries. The extra 7½d. will, according to my calculations—the Government can say if this is right—bring in another £51 million specifically from motor spirit, 85 per cent. of which is commercially consumed. But as much as £10 million will come from Diesel oil and about two-thirds of that represents buses and coaches and one-third goods vehicles. Of that £10 million, I understand, over £1 million will be an increase in the cost of London Transport vehicles.

The British Road Federation again put it this way, that
"the increased tax will prejudice the ability of London Transport to make the adjustment in London fares for which there has been such a large and determined outcry."
Other bus services throughout the country, passenger road services, will pay £5 million or £6 million more—on Diesel oil alone, without counting ordinary motor spirit.

3.45 p.m.

The Public Transport Association, which also represents a number of bus associations, have stated publicly that as a result the new increase in tax will mean
"a fresh and inevitable cycle of applications to raise fares throughout the country"
and particularly and positively that it will cause
"all round increases in provincial fares."
That statement was made only last week.

But it is not merely the transport experts who told us that this tax increase must mean higher fares. I can quote even higher authority. The present Leader of the House was very emphatic a year ago in arguing that the effect of the 4½d. increased tax would mean higher costs of transport. Indeed, he asked my right hon. Friend, who was then Chancellor,
"Does he really think that there has been no damage to anybody and to the motoring industry in particular by the increase in the duty which was imposed last year? … Has he not heard of increased bus fares? … Has he not heard of the increased transport rates, or has he been asleep since last year?"—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 821.]
The Leader of the House then told us that the rise of only 4½d. in the duty would mean an increase of ½d. per car mile in the cost of London bus traffic, and only a fraction less in the cost of buses elsewhere. This year's rise of 7½d. in the duty therefore, strangely enough, will push up costs rather more. The Leader of the House also said that the 4½d. increase would cost the Road Haulage Association £3 million this year it is going to be £5 million—British Road Services £1,500,000—this year that will be £2,500,000—and the charges, he said, would have to go up by 2 per cent. to 3 per cent. as a result. This year it means about a 3¾ per cent. further rise on the cost of the Road Haulage Association.

The right hon. Gentleman was by no means alone among hon. Members opposite in deploring the effects of the rise of the tax last year. The present Parliamentary Secretary to the Ministry of Transport, who no doubt is often consulted by the Prime Minister and the Chancellor and, perhaps, even by Lord Leathers—I do not know—on these matters—said that this increased petrol tax,
"is, in fact, a food tax, and a food tax of an onerous character which will reflect itself, without the slightest doubt, as the months go by."—[OFFICIAL. REPORT, 5th June, 1951; Vol. 488, c. 826.]
Of course, he used that as an argument against increasing the petrol tax, but, as the Chancellor seemed to think in the Budget that higher food prices are a good thing, he may take that as an argument in favour of it. Then there is the Minister of Works, whom we ought not to forget, although I understand he is not much consulted about economic policy by the Chancellor at the present time. He said about the petrol tax last year:
"As the cost of living goes up month by month, the situation becomes so dangerous that it must be wrong deliberately and as an act of Government policy to add to the cost of an item like transport which enters into the cost of re-armament both directly and indirectly through its effect upon other prices."
He then got even more eloquent and went on:
"Those who vote for this duty tonight will be voting for a depreciation in our money."—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 833.]
So in his view if he votes for this increase tonight he will be voting, on his argument, for a depreciation in the £.

Then there is the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) who I see is with us and who, as my hon. Friend the Member for Leeds, West (Mr. Pannell) remarked, executed a remarkable double somersault which is surprising even for such a stern and unbending Tory as the noble Lord. He wanted the tax to go up in 1948—I think I have it right—down in 1951 and I presume he is going to support it going up again in 1952. Finally, we have the hon. Member for Kidderminster (Mr. Nabarro). He threw all caution to the winds. He said, "I shall vote with great joy against this increase in the tax tonight."

The hon. Gentleman must quote me correctly. I said I should vote with great joy and great energy against it.

I did not want to lay it on too thick. I hope that both his joy and his energy will be unconfined in voting for the tax increase this evening.

We should remember throughout this debate that the price of petrol has, nowadays, a profound effect on transport generally, on aviation, on agriculture and on the production of certain special industries, including paint, linoleum, dyestuffs, rubber goods and so forth; and also on certain special cases such as disabled persons who use invalid chairs. When the tax is at a low level, it is so spread out as perhaps not to matter very greatly in this respect. That was, to some extent, the view we took two or three years ago. But when it rises to the extremely high level represented by this further jump from 1s. 10½d. to 2s. 6d., all these difficulties begin to be much more serious.

We have put down various Amendments, which will doubtless be discussed later, referring to the possibility of help in these special cases which have been made the more acute by this year's increase. There are very serious administrative difficulties, as I very well understand, and which I have endeavoured to explain in the past, about meeting these various cases. But we have put down these Amendments because we believe that with the higher tax it is at any rate the duty of the Government and of hon. Members on this side of the Committee to scrutinise these difficulties very carefully indeed, and to make sure that we have done everything possible to meet them.

In particular, I would commend to the attention of the hon. Gentleman a scheme which we introduced last year for giving a rebate on the export of products of industries like the paint and linoleum industry which have to pay tax on raw materials for their production. I hope he may be able to tell us that the Government have carried that further, though my information is that it has not had as extensive an effect as I hoped it would when I introduced it last year.

But the clear issue on the main increase in the tax is this. Here is a case where the Government are deliberately and gratuitously—at the same time as they are also deliberately raising food prices—raising the cost of transport and making inevitable a new rise in fares and charges later on, even if they try to stop it when that time comes. We say that is unnecessary and, in the circumstances of this year, completely wrong. It is because Parliament can here do something concrete and effective in helping to keep down fares, instead of indulging in empty electioneering gestures and charging at windmills, like the Prime Minister, that we have put down this Amendment and intend to press it to a Division.

I rise with very great diffidence, because many of us on both sides of the Committee are much worried about this increase in the petrol tax. I should like to be assured that this is only a temporary measure, because the repercussions of this increase over the country will be devastating in their effect.

We have been told by each Chancellor that it was a question of saving dollars, or our currency. But what is the actual effect of the imposition of any increase? It has very little effect, in fact none, on the saving of dollars and practically none on the saving of our own currency. That must be so, because 80 per cent. to 85 per cent. of the consumption is absolutely vital to the carrying on of the business of this country. The consumption by public transport, commercial undertakings, and the various other sources of national activity, amount to roughly 85 per cent. of the total consumption.

The 15 per cent. left is all that can be affected by the increased price. That 15 per cent. includes commercial travellers and doctors, and there is no possibility at any time of saving any more than 10 per cent. on the consumption. That is proved by the figures that we have year after year, and so it does not have the effect we are told it will have. It does not save dollars or currency.

What is the effect on the economic life of the country? At the moment we in Parliament are being harassed and bombarded by demands from public and private undertakings to be allowed to increase their charges, and these cannot be refuted. They are the effect, or the partial effect, of the last tax increase imposed by the previous Government. When we consider that, out of the 4s. 3d. charged for petrol, 2s. 6d. is duty, it must have a tremendous repercussion throughout our national life. It will cost the Glasgow Corporation another £2,000 a week or £100,000 a year. If it were possible at this moment to take off the petrol tax entirely, that is, the 2s. 6d. per gallon, the public transport undertaking in Glasgow would find their worries disappear. They would not require to put up fares at all.

It must have been after very careful thought, therefore, that the Government have decided at this time that the tax is absolutely necessary. But we want to be assured of that. The public demand is that fares shall stay where they are. Each undertaking is wondering how it can make ends meet. I suggest that it is impossible to take £1,250,000 per week from the national economy and not feel the effect in every sphere of consumption of light hydrocarbon oils.

I do not want to go into a lot of figures suggesting what might be done with the money that is involved, or to suggest that we might do something else, but I would say that we ought to be thoroughly assured that this particular tax is absolutely necessary, that it is vitally important that it should be imposed at this time, and that it will be revised at a very early date. I make that suggestion to the Chancellor.

4.0 p.m.

I am very pleased indeed to follow the hon. Member for Woodside (Mr. W. G. Bennett) because he has shown that in Scotland, at least, there is great antipathy towards this increase. I want to reinforce the arguments of my right hon. Friend the Member for Battersea, North (Mr. Jay) who opened this discussion, but I want also to state a special case—the case of the indigenous oil production in Scotland.

These oils are extracted from our own native oil shale measures, which stretch from Fife down through the Lothians into Peeblesshire. There are estimated reserves of 500 million tons, which may well be the saving of this country.

Fifty years ago, the news of the laying bare of the Torbane Hill and the Drum-gray measures, carried as much significance as the news of a great oil strike in Alberta or Texas today. Names such as Oakbank, Pumpherston and West Calder were names to conjure with in Scotland, and the names of Dr. Young and James Ross were household words. These halcyon days lasted right up to 1912, when the industry felt the cold blast of foreign competition from the free gusher wells of the Middle East and America. In 1914, at the outbreak of the war, there was a slight rejuvenation of the industry, and in 1919 Scottish Oils, Ltd., was formed.

But, by 1920, the industry was in the toils, and received a blow from which it never recovered, and here opens a sordid chapter of Scottish industrial history which is probably unequalled in industrial history in the world. No industry, probably, suffered so much privation as the Scottish oil industry, and no section of the industrial working class in Britain experienced such privation and vicissitudes as the workers in this industry.

The industry has a history of courage, initiative, bravery, loyalty and devotion to that particular part of the country. Although the workers in it suffered from unemployment, and sometimes 30 per cent. of the industry was cut down, and there would be three weeks of work and one week idle, although the workers accepted the heaviest cuts in wages which operated in the whole of industry, and although 10,000 men were reduced to 5,000, they still hung on, believing in better times. When I say that 19 buses leave one of the oil towns before nine o'clock every morning, one realises just what these people have to do in order to get a living, because they have the "bump of locality" well developed. The workers in 1926 even accepted the return of the eight-hour day in order to try to get the industry going again.

Successive Presidents of the Board of Trade and succeeding Chancellors of the Exchequer have recognised and conceded that special treatment is required for this great and essential industry. The Budgets of 1934 and 1938 gave evidence of this, and today I am asking the Chancellor to give special attention again to this particular industry. It is perfectly true to say that it is a small industry, but its by-products are very essential to the carrying on of life in this country. Not only do we produce heavy oils, but also the high octane spirit which is so necessary for this country in an emergency.

Unemployment was such in this particular part of Scotland as late as 1949 that the then Secretary of State for Scotland issued an order under the Distribution of Industry Act, 1949, but nothing was done. Although our people are paid less than any other section of the mining community, they run the same risks as people working in the coalfield as seen at Burngrange, West Calder, where there was a terrible disaster in recent years. Still they hang on to their industry, believing that the Government will one day utilise the Distribution of Industry Act and again supply them with the necessary employment.

These shale measures can be exploited to the great benefit of this country, because the day may come, and that not very far distant, when it will be impossible to bring oil from across the seas. Today, we are dependent on the generosity of Arab sheikhs, when we could exploit our own natural resources.

I am, therefore, going to ask the Chancellor to see to it that these people are assured of work, because they apprehend that the operation of this Clause will cause unemployment. If we lose these men, we lose them for all time. Do not let us imagine for a moment that it will be possible to absorb them in the rearmament programme, because any rearmament work in Scotland is far away from the oil district, and if we lose these men we shall lose them to the Colonies and they will have gone away for all time, so that the oil industry in Scotland will be doomed.

I appeal to the Chancellor to treat us a little more generously than was evinced last night, because not one contract for serge making has gone beyond the border of Scotland. I hope and trust that the Chancellor will remember that, while London may be London, Scotland is Scotland, and if we do not get justice in London, we will get it in Edinburgh.

I shall not attempt to follow the hon. Member for Midlothian and Peebles (Mr. Pryde) in regard to the specialised industry to which he referred. Perhaps an opportunity may arise later for other how Members to refer to certain effects on certain industries, but I should like to address my remarks to the difficulty which I personally find in reconciling this further increase with what we have said on previous occasions.

In the last three Budgets, the duty on petrol has been raised, and the effect on distribution and in the increased cost of transport has been very strongly felt throughout the country. In my own limited way, I have expressed my very strong feelings on this matter, and I am coming very strongly to the conclusion that this is a tax which it is far too easy for any Chancellor to apply, because undoubtedly it is only a question of putting up the price and a further tax will be paid from a very generous source.

I recognise that the circumstances have changed, as indeed we all recognise, but we cannot get away from the fact that, by adding this further burden of the increased tax on petrol, we are putting up the cost of transport on all sides. It is approximately true to say that 80 per cent. of this burden falls upon transport generally, and that, over the last five or six years, the transport bill of any corporation has virtually doubled itself. It is now becoming a very alarming feature of the cost of any item manufactured and of delivering it to the consumer. I do not suppose there is one single industry which does not use motorised transport at some stage of its manufacturing requirements. Accordingly, this burden is shared all the way round.

We in industry know that it is not always easy to add the actual increase to a particular item of costing. It is a question of finishing and rounding off the charge when the time comes. Sometimes a company may not pass on the whole of the extra burden it has to stand, but in many cases slightly more is put on to round off the figure. The final effect of such an increase is to add to the burden of the cost of living, and I very sincerely regret that it was found necessary in this Budget to levy this additional tax, in view of the fact that the price of petrol has been increased in the last three Budgets.

Reference has been made to the effect of this increase on fares generally. The burden of the increase in fares has been borne mainly by London. I know that transport from London reaches out to Southend and other districts, but in my constituency of Croydon, North, people have had to bear fare increases, not of 40 per cent., but of as much as 80 and 100 per cent. I have received over 150 letters from constituents complaining of this fact.

At some stage or other this additional burden, however one may try to alter costing, must be passed on to the public. It is essential that the Chancellor should realise that if this increase in the price of petrol has to be levied, it is something of which we want to hear the end in future years. We have reached the stage when we know that with the appearance of each successive Budget we are going to have an increase in the cost of petrol.

If the ordinary car user finds things getting tight and difficult, he may decide to use his car a little less often. He may find the answer to his difficulty by using his car every two or three Sundays instead of every Sunday. But that sort of retrenchment cannot be applied in the case of transport generally, and the extra cost has to be added to the cost of articles manufactured and to general transport, and it eventually results in higher prices all round.

I think this is a most dangerous tax. It will add to the burdens of industry, which has already experienced serious increases in its transport charges. Over the last five or six years transport has gone up out of all proportion, and therefore I should like to have a definite assurance from the Chancellor that petrol will not be further taxed in each successive Budget. On average, the cost of petrol in this country is some 20 per cent. above the cost of petrol in other countries. That is not a good thing when we are seeking export markets, because in the long run it makes competitive manufacturing more difficult.

I am very distressed indeed that it has been found necessary to levy this increased duty. I think my own views on the matter are reasonably well known, and before the Chancellor finishes with this part of the Finance Bill I hope he will give us some assurance that this is not going to be an annual event. I feel that those of us who have spoken against this further increase have been fully justified in doing so, and, as I say, I should like to get something definite from the Chancellor regarding future policy in this particular field.

4.15 p.m.

It is significant that the two speakers on the benches opposite have opposed this increase in the Petrol Duty, but at least they are being more consistent than their right hon. and hon. Friends on the Front Bench, and more honest. The hon. Member for Croydon, North (Mr. F. Harris), said that the increase of the Petrol Duty had become a very easy means of raising revenue. He might have added that there is always the danger that once a tax becomes too easy to increase, it is never decreased.

In moving this Amendment, my right hon. Friend the Member for Battersea, North (Mr. Jay), referred to the inconsistency of the Government in setting themselves up at the present time as protagonists in the cause for cheap fares and at the same time raising the Petrol Duty, because of its effect upon fares generally throughout the country. I believe that after Monday's debate on the question of fares, the travelling public, particularly in London, had a sense of anticlimax. They had seen the Prime Minister intervene in the question of fares and they had been given the impression that they were to be relieved of a considerable portion of the additional burden imposed upon them. But after the debate had taken place, it became quite clear that, not only was London not going to be relieved of more than a small fraction of the increased burden imposed upon it, but that in the long run fares in London would inevitably rise still further in view of the imposition of this additional fuel tax.

What does the Government's intervention amount to as far as fares are concerned? Certain concessions are proposed regarding sub-standard fares in London which will result in a relief of only £500,000 per annum. That is what the Home Secretary stated and what the Parliamentary Secretary to the Ministry of Transport confirmed in winding up the debate. This means that London is being extremely unfairly treated, especially in view of the fact that London will suffer most as the result of the increased Petrol Duty now being imposed.

Under the scheme approved by the Transport Tribunal, £18,500,000 was to be taken in increased farces from the travelling public throughout the country. Of that £18,500,000, £13,500,000 was to be taken from London, and that extra burden is already being imposed on the travelling public in London. But in the rest of the country the increase, so far, has only amounted to £3 million. That increase was imposed on 1st January with the rise in the monthly returns. The travelling public outside London are now to be relieved of the balance of £2 million.

London, therefore, is already bearing the largest portion of the increase in fares and is apparently going to suffer even more because of the very large amount of road transport used by the travelling public in the Metropolis. I consider, in view of the great increase in fares in London and in view of the additional burden which this tax will impose upon the travelling public in London, that this matter should be looked at again to see whether the relief proposed to be given in the rest of the country should not be applied in equal or even in greater measure to London.

Although the Central Transport Committee has accepted the scheme proposed by the Transport Tribunal, I think that, in view of this increased tax, the matters which have been the subject of much protest in London, such as the abolition of the 4d., 7d. and 10d fares, should be reconsidered, and the imposition of the excessive increases limited to 42 per cent., as was to be the case in the rest of the country.

It is a masterpiece of inconsistency on the part of the Government to pose as the champions of the travelling public, to intervene and give the impression that they are going to come to their relief, but to do it in very small measure and at the same time impose this duty. They can only be as ineffective as was King Canute's attempt to hold back the incoming tide. But whereas nobody could blame King Canute for failing to do so, the Government are actually encouraging the tide to come in.

The position of the British Transport Commission is bound to worsen as a result of the imposition of these duties. It will not only deteriorate financially because of the greater charge that will be imposed through the increase in the duties on petrol and other fuel, but the Commission will also suffer through their passenger road services in the provinces, in Scotland and, of course, through London Transport. They will suffer, too, from the effect of these duties on the Road Haulage Executive, that is, on British Road Services.

The British Road Haulage Executive will have an additional burden of £2,500,000 to meet as a result of increasing the duty by 7½d. a gallon. Last year, according to the Home Secretary on Monday, the Road Haulage Executive made an operating surplus of roughly £3 million. The imposition of these increased duties means that that operating surplus will be very largely eaten into. In other words, the British Transport Commission will lose £2,500,000 in revenue which they would otherwise have received from the Road Haulage Executive.

Incidentally, the £3 million is not simply a contribution to central charges, as the Home Secretary suggested on Monday, implying thereby that the Road Haulage Executive was not operating at a profit last year but was only contributing its share to central charges. The £3 million which the Road Haulage Executive made last year was an operating profit and the central charge which the Executive has to meet is, in effect, a payment of dividend out of profit. The central charge results from compensation which had to be paid following the taking over of a large number of undertakings on very generous terms.

The British Transport Commission will suffer materially from these increases in duties. If, at the same time as they lose revenue from their road haulage organisation, from London Transport and from the bus undertakings throughout the country in which they have an interest, the Government proceed with a policy of de-nationalising part of the British Transport Commission, then the burden which will be imposed on the transport user, whether he is a trader or shipper of goods or a member of the travelling public, will be one which will be extremely difficult to bear.

As my right hon. Friend the Member for Battersea, North, pointed out, the rise in the Petrol Duty last year brought that duty pretty well up to the limit. And the burden which the trader and the road user is being asked to carry today is one which is out of all proportion to the amount which is being spent on maintaining a safe system of roads throughout the country. It is estimated, for instance, that more than £220 million will be collected in duty on motor fuel at 2s. 6d. a gallon, plus a further £100 million a year in licence duties and Purchase Tax—a total of not less than £320 million from road users this year.

As against that total revenue from taxation imposed on road users, only some £75 million are to be spent on the upkeep of the roads during the financial year. The Petrol Duty, if it is to be justified, would be justified if it were used for improving the road system of this country. The amount of money which is being spent on improving our roads is vastly inadequate compared to the danger which exists on those roads. If we were told that this increase was to be spent on improving the roads, one would be perhaps a little less emphatic in opposing it.

The Government are behaving in a most inconsistent manner in imposing this duty. The travelling public will realise pretty soon that the pose of the Prime Minister, in particular, as one looking after their interests and intervening in this situation to bring relief to the travelling public of London was just a fraud and a deception. By the time that has come home to the people of London and the country and fares have gone up they will know how to judge the situation.

I feel a good deal of sympathy for what the hon. Member for Enfield, East (Mr. Ernest Davies) has just said about the disproportion between the money exacted from road users in the form of duty on petrol, licence duty and one thing and the other, and the actual amount spent on the roads. I have always thought there was a very strong case for a very substantial reduction, or redress of that position, and I hope that before long we shall achieve it, if possible in the reorganisation of transport that is likely to take place at an early date.

Furthermore, I do not think anybody who takes an interest in road problems and the finances of the British Transport Commission can look upon the continual elevation of the Petrol Duty with any enthusiasm whatever. I support much of what has been said on this side of the Committee about hardship caused to industry generally and to the transport industry and to road users. There are many thousands, perhaps millions, of people who have recourse to private vehicles or road public service vehicles who will have to face in due time an increase in charges.

But I thought the right hon. Member for Battersea, North (Mr. Jay), rather beat the pistol in saying that there had been actually an increase in transport charges as a result of the latest increase in the Petrol Duty. We have been threatened by the Public Vehicle Operators' Association and other bodies concerned that they are bound to put up their charges in time; but it cannot be said that so far any transport fares in the country have gone up as a result of what the present Government have done.

4.30 p.m.

I plead with my right hon. Friend the Chancellor of the Exchequer that in due time and season, when the financial position of the country has eased somewhat, he will make a substantial reduction in the Petrol Duty. The hon. Member for Enfield, East, talked about a limit having been reached last year. I do not know what he has in mind in his reference to a limit. Certainly petrol is still flowing into this country, and the revenue from it is still coming in. If he means that it is beginning to bear hardly on people in general, then I am with him, and I hope that there will be an early reduction.

But this Committee is not a committee sitting on the transport industry this afternoon. We are a Committee on the Finance Bill, and we must have regard to fiscal and economic issues. The right hon. Member for Battersea, North, put up a very specious case, I thought. He ignored altogether the main design of my right hon. Friend's Budget; and he ignored altogether the grand design of operations intended to redress the overseas balance of trade and to bring some order into our international currency position.

So far as the design of the Budget is concerned, my hon. Friends who have been able to congratulate the Chancellor on being able to give tax concessions in the Income Tax range this year might not have been able to do so if the over-all amount received in the Budget had been reduced by not having an increased Petrol Duty. The fact that we have this increased Petrol Duty means that my right hon. Friend has a certain amount more money which he can give in direct taxation reductions.

But surely the main consideration is the overseas balance of trade position. We are faced with an immense and continuing dollar and gold deficit, and one of the taxes to which it is most convenient to have recourse in redressing that situation is the Petrol Duty. Formerly that was not so much the case. Up to last year, I think that only 12½ per cent. of the tax received from petrol could be classed as saving us gold and dollars: but, thanks to the inept foreign policy pursued by the Socialist Government last year, that dollar content has now gone up to something like 25 or 30 per cent. The fall of Abadan is the real reason why the people of this country have this year to put up with an increased tax on petrol; and let everybody who uses the roads, and everybody who is concerned in industry who uses oil and petrol, realise that the chief architect of this year's increased tax is none other than the right hon. Member for Lewisham. South (Mr. H. Morrison). If it had not been for his futile handling of events in Persia, we should not have had the increased tax this year.

I wish to take the Committee away from the crowded city streets and out into the green fields; in other words, I wish to support this Amendment on agricultural grounds. One of the main problems facing the agricultural industry today is in endeavouring to bring down costs. I know I shall be reminded, because of the interest I take in this matter, that one of the mounting costs in recent years has been that of wages, but I have yet to find an hon. Gentleman on either side of the Committee who would dispute that the men who work in the industry are entitled to good wages.

The increased Petrol Duty is a cost which should never be passed on to the agricultural and horticultural industries. I am not asking the Chancellor to put more feathers in the bed. All I am asking him to do is to deal out a fair measure of justice to the agricultural industry. I know the Committee realises that petrol is used extensively by farmers and market gardeners in tractors and similar equipment. But apart from its use as tractor fuel, it serves for use in harvesting machinery and combines, as well as for stationary engines pumping water, generating electricity, operating milking and threshing machines, and in a variety of cultivators and other mobile and stationary equipment on smallholdings.

There were some 53,000 farm tractors and 45,000 market garden tractors operating on petrol in 1950. I cannot say how many there are today, because I understand that the census is taken every few years, and the latest figures will not be available until July, but I suggest that there are many more tractors operating on our farms today than there were in 1950.

It is estimated that in 1952 some 62 million gallons of motor spirit will be consumed by tractors and stationary engines used by agriculturists and horticulturists in purely land operations, and 7½d. a gallon thus means a yearly cost to the industry of £1,937,500. The additional tax of 7½d. per gallon brings the total tax on motor spirit to 2s. 6d. per gallon, and the total revenue derived from purely land work will amount to £7,750,000 in a full year.

I make the point, which I think is a fair one, that the tax on petrol was designed originally to create a fund for the construction and maintenance of roads. It was never intended to apply to the consumption of petrol on non-road operations. This principle has already been conceded, whereby petrol consumed in fishing vessels does not attract the tax. By the imposition of this tax on petrol when used in land machines, the Government have created what I regard as a very wide discrepancy between petrol and other fuels used on the land.

This discrepancy has resulted in the taxation of engineering, and the manufacturers of tractors and agricultural machines have been concentrating on the design of engines to run on tax free fuels, and the users of tractors have, by virtue of the tax lost, what they regard as the freedom of choice. The existence of a discrepancy between the two types of fuels was acknowledged by the then Chancellor in 1950, and I should like to call attention to something he said in imposing the 9d. tax in 1950:
"Certain agricultural operations are performed in some cases by vehicles or machines using fuel which is taxed and in other cases by vehicles or machines using an untaxed fuel. The additional duty now to be paid in respect of the former would involve a considerable extra cost to the farmer and an undue discrimination between the two types unless suitable measures were taken to offset the extra cost of running such vehicles or machines.
I propose, therefore, that an annual grant should be paid in respect of each such vehicle or machine based on a reasonable assumption as to the average amount of taxed fuel which each type consumes."—[OFFICIAL REPORT, 18th April, 1950; Vol. 474, c. 75–6.]
In taking that line the then Chancellor recognised the problem which would be created, and the rebate scheme to which I have referred operated, I think, for a year.

In most progressive agricultural countries, such as Denmark, Sweden, Norway, Switzerland, Canada, the United States Of America, New Zealand, France and Ireland, petrol used for farm purposes is either exempt from duty altogether or given favourable tax treatment. I would not presume to speak for the National Farmers' Union, but I think that what I am saying today would have their sympathy and support. Many countries throughout the world are operating a petrol rebate scheme for the benefit of agriculturists and horticulturists. The scheme works in this way: the users of such fuel pay tax on the purchase price and then make application for a refund based on the amount consumed in non-road work.

Is it not a fact that the increased cost of petrol for agricultural work has already been taken into account in the prices fixed under the recent Price Review?

I am addressing my remarks through you, Wing Commander Hulbert, to the Chancellor.

I shall be able to listen to what the Chancellor has to say when he gets up to speak. When the hon. Member for Kidderminster (Mr. Nabarro) is Chancellor of the Exchequer I will listen to him.

I was talking about this rebate scheme and explaining that the users of this fuel pay the tax at the purchase price and then make application for a refund based upon the amount consumed in non-road work. The schemes in operation have apparently been so designed as to prevent abuse by the use of tax-free fuel in road vehicles. There is no doubt that similar schemes could be operated here.

I hope that the Amendment which has been proposed so far as the use of petrol in farm machinery is concerned can be accepted. The Chancellor realises very well—as I do, living in an agricultural area—that we have to produce a lot more food. I think it can best be done by efficient methods. The increased petrol tax on farm machinery is a tax on farming efficiency, and we shall operate that tax at our peril. We cannot afford to run the risk and I hope, therefore, that the Committee will indicate their endorse-men of my view by voting for the Amendment.

Right hon. and hon. Gentlemen opposite are entitled to criticise and express their disapproval of the way in which we seek to raise increased revenue; but I think it would be very gracious if they prefaced their criticisms and observations by some admission that they—or, at any rate, the late Government, which they supported—are at least in part responsible for the circumstances which oblige us to raise additional revenue.

The need for raising such revenue arises not merely from higher prices; not merely from the fact of increased social benefits, pensions and family allowances, but also from the mistakes and blunders of the late Government which resulted either in a direct loss to the revenue or in a weakening of our sources of revenue. My noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) has just referred to the loss of Abadan and the effect that had on our balance of payments position, thus obliging my right hon. Friend the Chancellor to draw his Budget as he did.

Turning for a moment to the more purely revenue aspect of the situation, I see from the returns that the increase in revenue which the Chancellor hopes to get from the petrol tax is about £65 million. It is a very large sum, but it is not so much larger than the loss in revenue to the Exchequer arising from the loss of the refinery at Abadan. It must be remembered that the Exchequer used to draw the tax on the profits of the Anglo-Iranian Oil Company, the dividend accruing to them in shares in the company which they owned and also the Admiralty contract for petrol. It was a sum which was not very inferior to the sum it is hoped to raise by this tax.

4.45 p.m

I am not suggesting for a moment that the fact that one happens to lose money by losing a petrol asset in any way causes one to put a tax on petrol where it is distributed to commercial vehicles. There is no direct connection of that kind. Nevertheless, the fact that a loss of revenue arising out of the loss of a petrol asset should lead to an increase in taxation upon petrol may help to remind us and the public that weak and vacillating foreign policies inevitably lead to heavier burdens upon the masses of the people.

As the hon. Gentleman has referred to Abadan, I should like to ask him if he is aware that the oil—temporarily, we hope—lost from Abadan is now being replaced to a considerable extent by oil from other sources in the Middle East and that the dollar content of our imports is now going down? Will he also tell us, as he never has done, whether the Conservative Party would, in the last resort, have used force to maintain our position at Abadan?

The right hon. Gentleman raises two very interesting points. First, he says that we are replacing the oil supplies. I was not talking about the loss of oil. I was talking about the loss of revenue incurred by the Treasury by the loss of a company which the Treasury tax and in which the Treasury has a very large share. The right hon. Gentleman also asks what I have to say about the strategic and diplomatic aspects of the question—

I only wanted to say, had it been in order, that I would very gladly have debated that point.

I regard this tax as an evil but necessary one. It is a necessary evil imposed upon us by the mistakes of the previous Government. All I would urge is that hon. Members on both sides of the Committee should have the honesty, when talking about this tax in the country, to call it by what I suggest is its true name—the Abadan tax.

The Chancellor of the Exchequer cannot have been much encouraged so far by the speeches made from his side of the Committee, although in the last two speeches there has been a certain warmth and a measure of support, if not for the tax itself, at least for Conservative policy in regard to other events which hon. Gentlemen opposite allege have led us to this tax. However, anyone who believes that the financial situation is certainly serious and certainly requires severe measures has to meet a two-fold case. First, there is the point that the Chancellor requires the revenue, and secondly and alternatively, that the Chancellor cannot afford to go on spending so many dollars for oil.

As to the revenue point, I am bound to say that when the Conservatives were in opposition it was their invariable answer, when they were asked how they would replace any tax which they said was a bad one, to say that it was not their business to suggest how it should be replaced. They said it was their business to criticise the proposals put forward by the Government and not to make other proposals of their own. If they were pressed absolutely to the wall, they usually fell back on the assertion that anyway £200 million, £300 million or £400 million could be saved in Government administration and the loss could be replaced from this.

I agree with both those points of view. I do not see why I should not rely on them, but if one is to be fair I think one has to say that, rather than have this tax, if the revenue is essential it would be preferable to raise that revenue by other taxes or forgo other concessions which the Chancellor has made. I think everyone would agree that the more serious matter is the apparent loss of dollars for oil. Apparently, it was extremely serious last year. In the Economic Survey; on page 9, is given the United Kingdom balance with the dollar area, and apparently the net invisibles moved from a surplus of 14 million dollars in the first half of the year to a deficit of 283 million dollars in the second half of the year. I expect that a considerable amount of that may have been due to the oil situation.

Anyone who accepts the position that the Budget must be drastic is bound to meet that point, therefore; but a partial answer has already been given from the Chancellor's side of the Committee. To begin with, it has been pointed out that a great deal of the petrol which is used must be used, and especially must it be used if we are to maintain and then increase our exports. In his financial statement on 29th January, the Chancellor himself admitted that
"A good deal less than half the consumption of motor spirit is by private motorists, and not very much of this is used for pleasure motoring."—[OFFICIAL REPORT. 29th January, 1952; Vol. 495, c. 49.]
If this is a tax to achieve economy in the use of petrol, therefore, it will be at the expense of essential users and of industry. We have often heard it argued, and quite rightly, by the Conservative Party when they were in opposition that transport charges enter into every stage of production and are a considerable burden on the very goods we want to send abroad.

Does the hon. Gentleman agree with the Chancellor that something like half is used on ordinary motoring? I think 85 per cent. is used by the commercial user.

He may be quite wrong. What I do not think he can deny is that if the tax is to be effective in saving dollars, it can only be as a result of cutting down essential transport. Again, it has been pointed out that there is a very great discrepancy between the statements by the Government that they are anxious to keep down the fares and a tax which must have the direct effect of putting them up.

I should like to make a comment on one remark made earlier, and that is the tendency for all increases always to be passed on in full or even a little more than in full. Some of us who believe in private enterprise are very nervous about that tendency and we wonder whether it is essential every time the tax is increased to pass the burden on in full. I do not think a case can be made out for the tax even on those two grounds—the only two grounds which can be suggested for the tax and which admittedly are strong ones.

I should like further to refer to a point already made by the hon. Member for Norfolk, North (Mr. Gooch) on the very serious effect which this tax will have on agriculture and on all the country districts. Those are the people who will feel the effect of this tax most heavily and most directly. The hon. Member for Kidderminster (Mr. Nabarro) suggested that the extra cost of petrol was taken into account in the recent price review. I agree that that may well be so, but only an over-all picture can be taken into account. In constituencies like my own, the charges are very much heavier than they will be in certain other parts of the country.

I entirely agree with the hon. Gentleman, and I readily confess that the fact that the increased Petrol Duty is taken into the calculations of the price review helps only agriculturists and does not help the horticulturists. It will have an effect in remote areas such as Orkney and Shetland, or, of course, Western Worcestershire.

In that case we shall look forward to the support of Western Worcestershire in the Lobby opposing this tax. If the Government are anxious to see the population in the North of Scotland maintained and to get more food from that area, then there is nothing more essential than bringing down transport charges. This tax is going in the opposite direction. Petrol is already 4s. 9d. a gallon in parts of my constituency, and it is an essential commodity before you can move at all; there is no railway, and petrol is essential to passenger carrying or any form of agricultural life in the area.

There is an Amendment later on the Paper trying to exclude such counties from the effect of the tax. I see the very serious difficulty of doing anything like that, and the real answer is that, on balance, this is a bad tax for the country as a whole and particularly for certain areas which we are told the Government are anxious to help and into which they are already putting subsidies for certain purposes which are being more than cancelled out by rising freights. Those areas will be particularly hard hit.

As a member of a party which the electorate, by some aberration, seldom entrusts with power, one is perhaps under a particular obligation not to vote against proposals merely because one knows they will be unpopular. After all, we could always do that. In this case, however, we feel—and we are fortified by the support which last year we had from the party opposite and which this year comes from the party on this side of the Committee—that a very powerful case has been made for saying that this increased tax will be a burden on industry, will damage our export trade and will do very great damage to the transport system of the country as a whole, and in particular, in the remoter areas.

I am glad to have caught your eye, Wing Commander Hulbert, in two consecutive years rather early in the Committee stage of the Finance Bill, and of having had an opportunity on two consecutive years to speak on this rather controversial subject of the Petrol Duty. Already several hon. Members opposite have quoted the peroration of my speech last year, which was somewhat rumbustious in character as a result of the constant interruptions to which I was subjected by hon. Members opposite when they were seated on this side of the Committee.

It is a fact that last year I said during my speech, in the last few words, that I should vote with joy and with energy against the increase in the Petrol Duty. My reason for saying that was that it appeared to me at the time of the Finance Bill last year that there was not the overriding need which was made out by the Government of the day to impose this additional Petrol Duty, and, at a time when inflation was still threatening, I thought the effort ought to have been made to reduce certain items of Government expenditure; and I did, during the course of the Finance Bill debate, venture to say which items of Government expenditure ought to have been reduced to provide a sum which, in revenue, would have approximately equalled the amount derived from the increased Petrol Duty.

Before I pass to the main purpose of my speech may I make some reference to what was said by the right hon. Gentleman the Member for Battersea, North (Mr. Jay), who brought up, once again, the question of petrol prices in Western Europe. I have always taken the view that petrol prices in Britain should, if anything, be somewhat lower than those in any other Western European country, because we have immensely greater refining resources in the United Kingdom.

Nevertheless, I want to correct the right hon. Gentleman in his statement to the general effect that our petrol prices in Britain today are consistently higher than Western European prices. That is emphatically not the case. I have the pleasure every year, if I can find the time, of motoring a few thousand miles in Western Europe to observe general economic conditions and to provide myself with suitable data for refuting the spurious arguments of hon. Gentlemen opposite. The last time I was in Western Europe, a few months ago, the price of petrol in France was approximately 4s. 9d. a gallon and in Italy was over 6s. a gallon. The price of petrol in the cheapest market in Western Europe, Belgium, was a fraction under 4s. a gallon.

On the general picture in Western Europe it is not incorrect to say that the price of petrol is higher than the increased prices in the United Kingdom. I do not advance that as an argument for increasing the Petrol Duty; I merely say that the right hon. Member for Battersea, North, was incorrect in stating the contrary.

If the hon. Gentleman will look up the speeches of hon. Gentlemen opposite, particularly those on the Front Bench, he will find the refutation of all the arguments he is now adducing.

5.0 p.m.

I am afraid that the hon. Gentleman's memory is not as sound as it used to be. All he has to do if he wants to check my argument is to go into the Library and look up the prices of petrol in the various European countries.

There is no doubt that the effect of this increased Petrol Duty will be felt slightly in every industry in the country, including the horticultural industry. I am the first to recognise that. I would not withdraw one jot from what I said last year in a similar debate on the effect on manufactured goods, on horticultural products, and so on—on the adverse effect of the increase in the Petrol Duty. But there is the undeniable fact that since last year economic conditions have very greatly changed. At this time last year, the dollar content of all the oil imports into the United Kingdom was only 12½ per cent. Today, the figure is estimated to be 27 per cent. It is true that the dollar content may now be falling very slightly, but it is still more than double what the dollar content of oil imports was at the same period last year, and the reason for that greatly increased dollar content is none other than the loss of the Abadan refinery.

Hon. Gentlemen opposite are guilty of the most gross hypocrisy when they attack my right hon. Friend for taking—not a desirable measure—but a necessary measure in discouraging the consumption of petrol in this country by taking one of two recourses. The recourse he has taken to discourage consumption is to put the price up; the alternative recourse, in my view, would have been to re-introduce the rationing of petrol, and that, in my considered opinion—although this view may not be shared in all parts of the Committee—would have been a far worse step, with all the inherent costs and complications, than the raising of the price of petrol to discourage consumption.

How does this affect in any way the 80 per cent. used on commercial transport?

By encouraging economy in the consumption of petrol and oil. [HON. MEMBERS: "Oh."] Hon. Gentlemen opposite may scoff, but I have been in the happy position of being a road haulage operator for many years, and I know that as prices rise, as tax increases, as difficulties press upon the business and industrial community, the urge is for managerial executives to exercise the greatest possible efforts to economise in the consumption of such items as petrol and oil—

—and if they are successful in doing so it will benefit the national economy. The Chancellor's action in increasing the price, as an alternative to the rationing of petrol, with all the encumbrances of the bureaucratic control that would have been created—and the corruption—is, in my view, a very desirable step, and the right step.

Let me pass for a moment to another consideration that has not been mentioned to any great extent—why we have the complaint that the increase in Petrol Duty is going to have such an adverse effect on all costs. It is true to say that since the war there has been an accelerated tendency for freight traffic to be transferred from the railways to the roads. One has only to look at the great increase in the number of C licences since 1945 to recognise that is the fact. At the end of the war there were something under 400,000 C licences in the United Kingdom. Today, there are something of the order of 720,000 C licences.

While that may be a desirable state of affairs, a desirable development, none can deny in this Committee that the greatest single cause for the great increase in the number of C licences has been the inefficiency of the British railway system—the fact that manufacturers in so many different parts of the country find that they can get their goods from their factories to their destinations, or bring in their raw materials from the docks to their factories, by road haulage, using their own lorries under C licences, so much more economically and expeditiously than if the goods are transported by rail.

It is futile for hon. Gentlemen opposite to point an accusing finger at my right hon. Friend for trying to check the ever increasing consumption of petrol for freight traffic on the roads by raising the price of petrol, when they themselves are responsible by their nationalisation Acts for the shocking state of affairs that exists on the British railway system today.

Hon. Gentlemen in various parts of the Committee have referred to the fact that the Chancellor is raising an extra £66 million this year from the Petrol Duty. It is very desirable that he should do that and use as a complement, the incentives of Income Tax revisions to secure greater production in industry. Surely the outstanding feature of this Budget is that the great majority of skilled workers in this country and a large number of semi-skilled workers are very pleased indeed to have the opportunity of an increase in their net incomes and a reduction in the amount of P.A.Y.E. they have to pay week by week. I believe that has partly been made possible—not wholly, of course, but partly made possible—by the increased duty on petrol; and, inasmuch, it will be desirable, because it will economise in the consumption of a largely imported commodity whilst using the benefit fiscally provided for inducing greater incentive to increase production in our main industries, not the least important of which, of course, is the coal mining industry.

The hon. Gentleman has argued that the increased tax will bring in more revenue and that it will cause a substantial reduction in the consumption of petrol. If there is a substantial reduction in the consumption of petrol how will the Chancellor get an extra amount from the extra tax?

What I said earlier was that the increased price will encourage economy in the consumption of petrol. What I have now stated, is the complementary feature—and I think that this is equally important—that the opportunity has been provided, in measure, to enable the Chancellor to provide incentives by revising the Income Tax and reducing P.A.Y.E. That is perfectly sound.

There is no contradiction. The two are completely complementary. Had there not been this additional revenue from the Petrol Duty it is doubtful whether the incentive could have been provided, in the same measure, within the P.A.Y.E. system.

In my view there is nothing whatever that is inconsistent between the attitude of the Members of the Conservative Party last year in opposing an increase in Petrol Duty and the attitude they take this year in supporting one. There is nothing inconsistent about it at all. The right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell), is having a quiet laugh to himself. There are two right hon. Gentlemen on the Opposition Front Bench who are laughing, yet they were members of the guiltiest Cabinet in British history—the Cabinet that handed over the Abadan refinery. And the whole British nation will today have to pay the price for their measureless folly.

On a point of order. I understood, Wing Commander Hulbert, that you ruled out of order the hon. Gentleman the Member for Preston, North (Mr. J. Amery) when he was replying to a charge about the Abadan refinery. Therefore, if we are to be debarred from replying either on that side or this, these assertions should not be bandied about.

Had the hon. Gentleman continued I should certainly have called him to order.

Is it not a fact that I was referring solely to the economic implications flowing from the loss of the Abadan refinery, whereas another hon. Gentleman earlier in the debate was referring to diplomatic matters? Surely it is in order to refer to the economic implications of the loss of this oil?

It is in order to refer to Abadan so long as the references are to the oil position, but it is not in order to refer to Abadan to adduce political arguments.

I am glad to have the pleasure of following the hon. Member for Kidderminster (Mr. Nabarro). If I had known that I was to do so, I should have taken the opportunity of reading in more detail what he said last year. I do not think that he has convinced the Committee of the reason for his change of attitude. He may have convinced himself; he has made a very valiant effort to do so. Whether he has succeeded in that I do not know, but certainly he has not succeeded in convincing anyone else in the Committee.

The chief point at issue is not whether the Chancellor of the Exchequer can afford to do without the £66 million which this duty will bring in, but whether our economy can afford to have this tax. In a time of a rising cost of living, any tax which imposes a severe burden on the people and accentuates the trend is a bad tax. I should like to quote what was said by the present Minister of Works in this connection last year. I am sure that a good many Members on the Front Bench opposite rather wish that they had not said some of the things they said last year. The right hon. Gentleman said:
"… it is wrong in conditions of rising prices to put a tax on the costs of production."
He further said:
"Those who vote for this duty tonight will be voting for a depreciation in our money. They will be voting to increase the cost of rearmament. And they will be voting to increase those hardships which accompany a rising cost of living, and which press most severely on those with large families and small incomes. Whatever may be the politics in this Clause, I think it must be offensive to the conscience of every one Of us."—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 837.]
Perhaps the Government think that they have cured the rise in the cost of living. In "Britain Strong and Free" will be found a statement to the effect that it would be impossible to take off the food subsidies or reduce them at a time of a rising cost of living. But since the Chancellor has reduced them by £160 million, perhaps we have to assume that the Government think that the rise in the cost of living has been stopped. But obviously no one in this country believes that, and the effect of this duty will only accentuate this rise.

First of all, as has been said repeatedly, this duty will have a serious effect upon fares. As was said by my right hon. Friend the Member for Battersea, North (Mr. Jay), the present Leader of the House asked my right hon. Friend the Member for Leeds, South (Mr. Gaitskell), when he was Chancellor of the Exchequer, whether he had not heard of increased bus fares. I am quite confident that every hon. Member on the Front Bench opposite this year has heard of increased bus fares since the Prime Minister became responsible for transport. Obviously this will have an effect upon fares at a time when we are seriously considering the increases which have already been recommended.

5.15 p.m.

The present Leader of the House said in the debate last year:
"I also bear in mind the consideration that road transport, surely above all else, is the life blood both of the defence programme and of industry. It is the one industry which ought not to suffer specific imposts."
He also said:
"I say that the need for cheap transport is paramount, and here we are deliberately forcing up its price."—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 824.]
It will have a serious effect upon the price of food because of the increased costs of distribution and of production. The Parliamentary Secretary to the Ministry of Transport last year described this as a food tax. If it was a food tax last year, then obviously it is a food tax this year. It is bound to increase the cost of food and it is bound to increase the costs of industry. It will increase the costs of industry directly, particularly those firms which are using oil; even small and medium-sized firms are in many cases using large quantities of the light hydrocarbon oils. A firm of dyers and cleaners in my own constituency uses 20,000 gallons of white spirit per year, and this duty will mean a serious increase in that firm's costs in the coming year. That can be multiplied by thousands of firms throughout the country.

There is also an indirect increase in the costs of industry because of the increased transport rates. It will increase the cost of building new houses. The Government are still aiming at their target of 300,000 houses, I understand, and the increased price of petrol is bound to increase the building costs. It will also increase the cost of the distribution of coal. On whichever side of our economy we look, it means an increase in the present cost of living.

The Coal Merchants' Federation of Great Britain estimate that for every penny per gallon cost of petrol, the cost per ton of industrial distribution is approximately three-tenths of a penny. It follows that the present tax of 1s. 10½d. represents a cost of about 7d. a ton in industrial distribution. The approximate figure for retail distribution is that for every penny per gallon cost of petrol the cost per ton is approximately half. A tax of 2s. 6d., therefore, represents 1s. 3d. a ton.

If we consider this duty from the point of view of the cost of fares and transport generally, and the costs of food, building and fuel—in fact, from every aspect—we see that it is likely to send up the cost of living. I come back to what I said at the beginning of my speech. It is not so much a question of whether the Chancellor can afford to do without this £66 million, but rather whether our internal economy at the present time can afford to have this impost placed upon it.

Listening to the speeches from the Opposition benches this afternoon, it is difficult to remember that it was the Labour Government which twice increased the duty on petrol. The right hon. Member for Battersea, North (Mr. Jay), in moving the Amendment, charged the Conservative Party with inconsistency in proposing this additional duty when last year most of us spoke against the increase in the Petrol Duty. But he did admit that much had happened since then.

Unfortunately, owing to the rules of order, I cannot develop the argument, but I for one believe that the present increase in the Petrol Duty follows inevitably from the loss of the Abadan refineries. Indeed, at the time, I warned my own constituents that it was impossible to abandon and cast away our greatest single overseas asset without inflicting a deep injury upon this country and upon our people.

This increase in the petrol tax is part of that injury. It is, as we all agree, going to increase the cost of transport and the cost of living in this country. For that reason, I should like to join with those who have already appealed to the Chancellor of the Exchequer in the hope that he will find it possible, when the balance of payments position improves, to reduce this tax which today we have unfortunately to increase.

The fact that we have to increase it today is, in my submission, due to the actions and incapacity of the last Government. Indeed, that view is borne out and reinforced by the Economic Survey, page 15 paragraph 25, where we read:
"Purchases of dollar oil to replace Persian oil have been costing the sterling area in this initial period over £100 million a year."
That cost is an appreciable percentage of the drain on our gold and dollar reserves.

On 11th March, the Chancellor of the Exchequer said, in this House:
"Since the main objective of the Budget is to relieve our balance of payments difficulties I must pay particular attention to a scarce product which costs us foreign exchange."—[OFFICIAL REPORT, 11th March, 1952; Vol. 497, c. 1296.]
It is because he said that and because we must discourage consumption that some hon. Members on this side of the House have taken the view, with which I agree, that the only possible alternative was worse than increasing this tax. That alternative was to resort to rationing, which in our rural areas would be unfair and very unpopular and would, moreover, as we all know, involve the employment of 3,000 people in unproductive work. It is due to the mishandling of the Abadan story that we not only lose the oil which we got from Abadan but we lose the foreign exchange, including dollars, we earned by selling it.

On a point of order. I think that you ruled, Wing Commander Hulbert, that Abadan could be mentioned from the economic point of view. The whole trend of the argument of the hon. Gentleman is on the political side of Abadan, and he has been using that argument for quite five minutes.

I have been listening to the hon. Gentleman and I am hoping that he will comply with my Ruling.

Further to that point of order. Would you, Wing Commander Hulbert, please define exactly what you mean by this distinction? Apparently, hon. Members are entitled to refer to anything connected with oil but they must not get involved in politics. It is very difficult to talk about oil without getting involved in politics.

My Ruling was that hon. Members should confine their argument about Abadan and relate it, as far as possible, to oil and the economic situation. It would be quite out of order to discuss military or political events.

To give the specific figures which arise from the loss of Abadan is surely a quite essential economic aspect but not political.

Do I understand that it would be out of order for any hon. Member to refer to the causes of the loss of Abadan?

It would not be in order to refer to the cause of the loss of Abadan, but the consequences thereof may be referred to.

I was trying to keep within the Rules of order which you laid down, Mr. Hulbert. For once in my life, I find myself in agreement with the right hon. Member for Leeds, South (Mr. Gaitskell), when he said that it is very difficult to discuss this matter of economics without also impinging upon politics. I will do my best not to do so.

I was saying that when we lost the oil of Abadan we also lost the foreign exchange, including dollars, which the sale of that oil brought us, forcing us to purchase dollar oil to an extent which the Economic Survey calculates to amount in value to £100 million a year in the initial period. It follows that it is impossible to view the loss of 32,300,000 metric tons of Abadan oil per annum and 18,000 barrels a day of aviation spirit without realising that that loss must impinge upon the economic situation of the cost of living of the people of this country.

I will, owing to the Ruling which has just been given, pursue this matter no further, beyond saying in a single sentence, that the result of what was done by the late Government at Abadan has been to injure deeply capital investment in the Colonies and to hinder colonial development. Obviously this increased Petrol Duty must discourage consumption, though it is true that the greater part of that consumption is by commercial users and not by private cars.

If the Opposition attempt to deny—as I understand they do—that the increased duty follows inevitably from the loss of Abadan, surely they will have the candour to admit that in that case this extra amount of revenue which is now being raised does also in fact help to finance the tax reductions and pay for the increased benefits and increased social services which this Budget includes. Therefore, the Opposition to this increased duty is in fact no more than a disreputable and unedifying attack upon the increased social services.

Are we to understand that there is no relationship between the abolition or the slashing of the food subsidies and the concessions given by the Chancellor of the Exchequer, which he related directly, in his Budget speech, to the taking away of the food subsidies.

I do not think that the hon. Member was listening very closely to what I said. My argument was that the increased Petrol Duty followed inevitably upon the loss of Abadan, but the hon. Member, by some form of mental gymnastics, denies the truth of that. He cannot deny that this increased Petrol Duty does help to pay for the increased social services which this Budget gives to our people.

In being called by the Chair for the first time since the end of 1946, I find myself encouraged by the observations of two hon. Gentlemen opposite who have spoken in this debate. I refer to the hon. Member for Woodside (Mr. W. G. Bennett) and to the hon. Member for Croydon, North (Mr. F. Harris). I should like to tell them that, having known the anxieties of a Government Whip's office on the occasion of an important vote when the majority has not been too big, I can imagine the fluttering in the dovecotes as the Government Whips listened to the two speeches to which I have referred. I look with interest to see into which Lobby the hon. Gentlemen go a little later.

The hon. Member for Croydon, North, was honest enough to tell us that he felt that the attitude adopted by the Government in connection with the petrol tax was inconsistent with the point of view expounded from these benches by the then Opposition last year, and that he would find it difficult to reconcile it with the things he had said on that occasion. I thought about going to the Library, looking up the speech of the hon. Gentleman, and using it in this debate because I thought it was really good.

I want to speak for a few minutes on an aspect of the problem totally different from anything which I have so far heard in the debate. I want to appeal to the Chancellor of the Exchequer, through the Financial Secretary, to reconsider the question of the imposition of this very heavy petrol tax. I know the Chancellor will say that he is only doing what his predecessors have done. In this I agree again with the hon. Member for Croydon, North, that there seems to be a great temptation for all Chancellors to increase existing taxes. I am not sure whether it is really a good thing, whether it applies to petrol or anything else.

We must reach a stage where the tax becomes penal, and I believe that this tax has now gone beyond the limits of economic possibilities and that there will result what we have so often argued in this House, the operation of the law of diminishing returns, and the Chancellor will probably not get the revenue he expects from it.

5.30 p.m.

I disagree with the hon. Member for Kidderminster (Mr. Nabarro) who argued in favour of rationing. I understood that the Chancellor increased the duty on this occasion not to try to discourage petrol consumption but in order to get revenue.

I did not argue in favour of rationing. I said that the Chancellor's only alternative for discouraging petrol consumption was to impose rationing instead of a higher price, and that I thought the higher price would be preferable.

I am not making a point of it. I merely say that I thought the Chancellor increased the duty with the intention of getting revenue rather than of discouraging consumption, although that will be its effect.

I believe we have gone beyond the limits of real economic possibilities with the duty. I am not so much worried about the effects in so far as the British Federation of Road Users or industrialists are concerned. They have a very sound case, and they have particularly good advocates in this House to put their case. I want to direct attention to the ordinary working chap, the fellow who at week-ends takes his family into the country in a seven or eight horsepower car, very much like the one which I believe is owned by the noble Lord the Member for Inverness (Lord Malcolm Douglas-Hamilton). There are many thousands of such men.

The Chancellor has dealt that type of man a double blow. He has first knocked him on the point of the jaw by increasing his Road Fund licence duty and he has then doubled him up, as he sinks to his knees, with a blow to his solar plexus, by increasing the Petrol Duty. It is significant that no protest on behalf of these people has been made this time—I believe for the first time since the end of the war—by the two motoring organisations who cater for them.

I am a member of the A.A., and I recall the amount of correspondence I received in recent years about the "punitive" effects of increases in the Petrol Duty by my right hon. Friend the Member for Leeds, South (Mr. Gaitskell), and our late colleague Sir Stafford Cripps. It is time someone said something here to protect and assist such people, and that is one of the reasons for the Amendment.

I want to give four personal examples, which I believe the Financial Secretary will agree cover a fair cross-section of the general public. There is an immediate relative of mine who is a maintenance fitter in a municipal omnibus garage and is, therefore, not exceedingly well remunerated. He has an eight horsepower car. He is the secretary of a church and does an enormous amount of work for the church in fetching and carrying visiting ministers, and so on, and meets the cost of the petrol out of his own pocket. He gave up smoking towards the end of last year very largely because of the rising cost of living, and he has now come to the point where he must say, "I am afraid that I shall now have to sell my car. I can no longer run it."

In my constituency recently there came to see me a lady who is blind because she is as yet unable to have a cornea grafting operation. After we had discussed a question relating to that, she said, "Do you think that you can do something in the House of Commons to persuade the Chancellor not to impose the additional duty on petrol? I am blind and I have many interests, some religious and some in connection with blind organisations, and my husband takes me about in a seven horse-power car, but he will now no longer be able to run it."

I hope I may be excused for quoting my own case. I have a 10.9 h. p. car. I find that it is necessary. Hon. Members will agree that if they want to do their job efficiently and fulfil their engagements they really need a car of some sort in which to get about. I have been a smoker for 35 years. No one enjoys a pipe of tobacco more than I do—or rather, more than I did. I have come to the conclusion that I cannot afford both smoking and a car. I have had to make a choice, and I have chosen to keep my car because I believe that it gives pleasure to the whole of the family whereas my pipe gave pleasure only to me. The Chancellor has forced me to do that, and the result is that he has lost a considerable amount of revenue from me. That type of case can be repeated over and over again.

I want to point out to the Committee and to the Financial Secretary the unsatisfactory way in which the duty applies. I want to quote the case of a businessman friend of mine. I hope he will not mind my doing so; at all events, I shall not mention his name. He has a very high horse-powered car and his Road Fund licence duty has hitherto been £23 per annum. That will now be reduced to £12 10s.

I said that it will be reduced. Does the hon. Member suggest that the Chancellor is likely to withdraw his proposals? My friend's Road Fund licence duty will be reduced by 10 guineas a year. It means that he can use at least 325 gallons of petrol before really being affected by the 7½d. increase in duty.

What it means is, that while the fellow with a seven or an eight horse-power car has had his Road Fund tax increased by £2 10s. and in addition to that, on a consumption of 325 gallons of petrol, he will be paying another £10 10s., making in all £13, the man at the other end of the scale will be getting a present of £10 10s. a year from the Chancellor of the Exchequer.

I hope the Financial Secretary will at least give consideration to the points that I have put. I know they are only small points and are not concerned with high policy, but they represent the point of view of the people in this country who expect their interests to be protected by the House of Commons. I hope that the Financial Secretary will agree to look at the points I have put to him. We all have to bear our share of taxation and we accept that as a fact. Our country has to be run and we have to make provision for it. We must find the money in various ways, but it behoves us in this Committee to try to consider ways and means which will inflict the least hardship upon the community in general. I commend these cases to the Financial Secretary.

The hon. Member for Bristol, South (Mr. Wilkins) said that he had not spoken in this House since 1946. I do not know whether to congratulate him on a maiden speech, but I suppose I should not. He is an interesting example of the demi-maiden. I liked his speech very much indeed. The Committee this afternoon seems to be in a Council of State mood, since although political arguments have been thrown across the Floor, everyone has approached the subject with moderation.

I hope hon. Members will bear with me for a few moments if I address a word or two to the Committee generally. I cannot see any point in hurling charges of inconsistency across the Floor of the House. Circumstances have forced both sides to be highly inconsistent. If we come to think about it it is rather ironic that the speeches that were made by Conservatives in the last Parliament are made by Socialists in this, and vice versa, though whether it is conducive to respect for the House of Commons from the public at large is another question.

What surprises me is that no one has drawn the obvious conclusions from it. The conclusion that I draw is this: we are here engaged in trying to raise revenue, but no single tax introduced by any Chancellor of the Exchequer would ever meet with approval from the other side of the Committee or indeed from this side. Any tax is most detestable and most unpopular. The obvious moral can be stated in a very few words. Government expenditure in this country has reached such a level that if any new tax is proposed it is bound to do harm and cause hardship.

Our attention should be directed to trying to find measures of economy, but we are up against this dilemma, that if any particular measure of economy is suggested there will be an outcry from some section of the Committee, if not from every section, against the new economy.

Is the hon. Member aware that on this side of the Committee we would all support an economy on the National Debt interest which would save the extra £70 or £80 million which the Chancellor is seeking? Would the hon. Gentleman support that economy?

No, that is not a true economy. We have to find an economy in some branch or branches of actual Government expenditure. I hope I shall be in order when I say that during the debates on the Finance Bill we ought to be impressing upon our respective Front Benches that this country is overspending its income to such an extent that any taxation is bound to be inequitable and to cause hardship. I very much fear I am out of order and I shall sit down. The sooner all sides of the Committee realise that we have got ourselves into an impossible position with regard to taxation the better it will be.

5.45 p.m.

I hope the hon. Member for Farnham (Mr. Nicholson) will forgive me for not following him as to the way in which this money is to be spent, for it would not be in order. I notice that the hon. Member sat down rather fast when he got on to that point. I agree with him that there is something slightly ironic about this debate, and I have no doubt that those who bear the burden of this sort of taxation and particularly those who are most concerned, like the motor industry, are saying, "Plus ca change, plus c'est la même chose." All Governments find petrol a very convenient method of raising money.

I hope the hon. Member will support me to this extent—calling the attention of the Government and the Committee to the very excellent report that he has produced showing how quite large sums of State expenditure can be economised on. I should like to congratulate him on that publication.

I thank the hon. Member very much, and I hope the Government will take note of those items where they can really save money without interfering with very useful policy. It would not be in order for me to pursue this any further, but I thank the hon. Member for his kind words.

The question of the direct level of tax on any particular commodity, particularly hydrocarbon oils, is an important matter. It is something we have to consider in relation to all other taxes. Certainly while the control of imports is still necessary there must be a control of the price of petrol. If there were no Government control of price under conditions of free competition, it might reach a higher figure than it is going to reach even when this tax is imposed. We on this side of the Committee are in agreement that the price of petrol and the price of hydrocarbon oils generally should come under Government control and should be fixed by Government decree.

What we have to take account of are the considerations that must be borne in mind when the price is fixed as it will be fixed by this tax. If there were no tax and if there were free competition, I rather imagine that the profits that would be taken by the oil companies would be so excessive that even hon. Members on the other side of the Committee would find themselves rising to their feet to protest. We agree that part of the price the public pays for petrol should be paid in taxation, but when we come to the actual considerations which have to be taken into account when fixing the level of taxation and, therefore, the price of petrol, there are several points to be borne in mind, most of which have already been mentioned.

The first was mentioned by my right hon. Friend the Member for Battersea, North (Mr. Jay) in his opening speech, when he drew attention to the fact that the world price outside the United Kingdom is 3s. 9d. and now the average price in the United Kingdom is going to be 4s. 3d., whereas before this new tax came into operation—

I am talking about the world price, not the Western European price. After the tax imposed last year by the Labour Government, the price was still below the world price, that is to say, 3s. 7½d.

The other main considerations which have to be borne in mind are the necessity for the Government to raise revenue and the possibility of reducing the home consumption of an imported commodity. I should like first of all to consider for a moment whether there was, in fact, need to raise revenue and if there was, whether it was necessary to do it in this way? The speech made by my hon. Friend the Member for Bristol, South (Mr. Wilkins) was extremely interesting because it brought out in a homely manner what is, in fact, not only the effect of this imposition on motorists but the total effect of this Budget, taking all the impositions and the reliefs together, in regard to the distribution of income to those who are worse off and those who are better off. I would not like to try to follow him in the extremely homely examples he gave but which seemed to me to put the case very well.

If we pass the Bill, we shall have a very considerable reduction in direct taxation and considerable increases in indirect taxation. One form of increased indirect taxation is the removal of the food subsidies and this tax which we are now considering is a further increase in indirect taxation. It is generally held that an increase in indirect taxation and reliefs in direct taxation are a form of regressive taxation and provide reliefs for the better off and additional burdens on those who are worse off. When one takes into account the removal of the food subsidies, and the undoubted increase in transport fares which must take place when the full effects of the tax we are discussing has been felt, then the total effects must be a substantial increase in indirect taxation.

It has been claimed by hon. Gentlemen on the other side that the taxation has been imposed in order to raise the social services and to provide other forms of relief. I would draw hon. Members' attention to the fact that the reliefs which are now given in direct taxation amount to £181 million this year and to more than £130 million in a full year and that they are practically all going to people in the higher income levels. On the other hand, in addition to the £160 million-odd increase resulting from the reduction in food subsidies and such other increases in prices as may have to take place later in food and transport, there is a further increase of £66 million due to this tax.

My hon. Friends have already referred to the effect of the tax on the British transport Commission and other road services. The Commission has estimated that the total effects will be something like £5 million to £6 million in a year. As a representative of a London constituency, with large numbers of constituents travelling long distances from the outskirts of London to the centre, I am very concerned about the increase of more than £1 million which has to be found by the London Transport.

I am told that the Transport Commission estimate that the increase in taxation, in steel prices and in National Insurance contributions will add to the burden on the Transport Commission alone—it is only part of the transport system of this country—about £10 million in a year. This will all have to be put on to the cost of goods and services and to the expenses of the people who are travelling to work.

If the special classes which are being protected by the Prime Minister by his intervention in the transport discussion continue to be protected, the whole of the charges will fall on the general travelling public. This is a very important consideration when we consider how the transport charges should be allocated. Incidentally, it was Member from the other side of the Committee who referred to the fact that the public vehicle proprietors, the private road haulage transport contractors, have said that this tax undoubtedly will mean an increase in charges.

I am very glad to have seen in a speech made the other day by an official of the Road Haulage Executive that, owing to the very great increase in efficiency which the Executive have been able to bring about in road haulage during the past year, they are not going to increase the charges made by nationalised road haulage. It remains to be seen what the full effect of these charges will be. I hope that the Executive will be able to continue to maintain their present charges and make the profit that they have been making at the present time.

Hon. Members have referred to the effect of the increased charges in the many industries where oils are used as a basic raw material. I do not want to follow them in that argument, but I would ask the Financial Secretary and the Chancellor of the Exchequer, who I am glad to see is now coming in, whether they will see if some way can be found to exempt road passenger transport from these charges. Some of my hon. Friends have put down Amendments dealing particularly with Diesel oil. It may be that here is a way of distinguishing between the fuel that is used in road transport and road haulage and other fuels. The increase in the number of Diesel-engined vehicles is very great indeed and is continually increasing, particularly in road transport. In London it is already 100 per cent. but in many fields it is increasing both in passenger transport and in heavy road haulage.

One other matter to which I should like to direct the attention of the Chancellor of the Exchequer is in regard to the use of Diesel and heavy oils on the railways.

I thought you said, Sir Charles, at the beginning of the debate that it would be better to deal with all these points in one debate.

No; I simply pointed out that I would select the first Amendment and that the Amendments selected afterwards would not be debated at length.

I hope I shall be able again to catch your eye because there was one point I wanted to make in particular about the effect the tax might have. This is not specifically referring to passenger transport but to Diesel-engined locomotives and to gas turbine development on the railways. There is a very considerable increase in the use of heavy oils in this way.

I propose selecting the Amendment at the top of the page 597, which covers all Diesel oil.

I shall not pursue that matter any further, Sir Charles.

Coming back to the general argument, I think this tax might be reasonable if the country were suffering from a really gross inflation, but the Chancellor has told us that he expects that we might be getting into the reverse situation and be in danger of a slump. Artificially to raise prices by removing subsidies and increasing indirect taxation I should have thought to be a wrong policy at the present time.

It is not necessary for me to quote words used by hon. Gentlemen opposite in last year's debate. Other hon. Members have done that, and my right hon. Friend the Member for Leeds, West (Mr. Pannell) did it very effectively on the Second Reading of the Bill. I want only to remind hon. Gentlemen opposite that they have repeatedly voted, and particularly in 1950 and 1951, against increases in this taxation. On the whole, the tax has had a very bad reception from Government supporters and I hope that on this occasion they will support our Amendment.

I am glad to be following the hon. Member for Edmonton (Mr. Albu). I should like very much to go into this large question of the relative merits of direct and indirect taxation, and I might almost be tempted to stretch your patience, Sir Charles, to see how far I could go. If the hon. Member for Chesterfield (Mr. Benson) were in his place, it could be even more interesting, because I have exchanged opinions with him across the Floor of the Committee on previous occasions. He has held very different views from those held by the hon. Member for Edmonton about indirect taxation.

The hon. Member threw out the generalisation that this is a form of taxation which falls most heavily upon the poorer sections of the community. That may be true in regard to indirect taxation upon a necessary food or something like that, but whatever may be the merits and demerits of the tax that we are now discussing I should certainly have thought that that was not true of it. Admittedly an increase in the price of petrol in itself bears hardly upon every section of the community but, between the two, on the whole it bears more hardly on the rich than on the poor. Whatever else may be alleged about this tax, I should not have thought that argument was a valid one.

6.0 p.m.

Will the hon. Gentleman allow me to interrupt? He has probably seen the figure, but 85 per cent. of the petrol is used in industry, and one presumes that most of that enters finally into the cost of consumer goods and, therefore, into the goods consumed by the mass of the people.

I do not think we need delay the Committee on this point. I admit it affects every person but, between the two, the products of industry on the whole are bought more by the rich people than by the poor. The hon. Member does not dispute that, does he?

I am sorry, but I do. There are many more poor people than rich. The rich are a small part of the population.

But I do not think the hon. Member can say it is a tax which falls with special severity on the poor. We all admit it is a tax which everyone dislikes; in fact, everyone dislikes every tax. The point I want to explore is this. I represent a constituency which includes a large part of the suburbs of Swindon, and one of the most persistent arguments brought before me during the recent Election was that the railways must be preserved as a strategic necessity—

Royal Assent

Whereupon The GENTLEMAN USHER OF THE BLACK ROD being come with a Message, the CHAIRMAN left the Chair.

Mr. SPEAKER resumed the Chair.

Message to attend the Lords Commissioners.

The House went; and, having returned

Mr. SPEAKER reported the Royal Assent to:

  • 1. Metropolitan Police (Borrowing) Powers Act, 1952.
  • 2. Cinematograph Film Production (Special Loans) Act, 1952.
  • 3. Export Guarantees Act, 1952.
  • 4. Hydro - Electric Development (Scotland) Act, 1952.
  • 5. Miners' Welfare Act, 1952
  • 6. Army and Air Force (Annual) Act, 1952.
  • And to the following Measure, passed under the provisions of the Church of England Assembly (Powers) Act, 1919:

    Church of England Pensions Board (Powers) Measure, 1952.

    Finance Bill

    Again considered in Committee.

    [Colonel Sir CHARLES MACANDREW in the Chair]

    Amendment proposed: In page 1, line 16, leave out subsection (1)—[ Mr. Jay.]

    Question again proposed, "That the words proposed to be left out stand part of the Clause."

    6.15 p.m.

    As I was saying, I happen to represent a constituency which includes a large area of the suburbs of Swindon and which has a very considerable railway vote. One of the most persistent points that was put before me again and again at meetings during the last Election, with great courtesy and force, was this. I was told that the railways were, in the first place, a strategic necessity and secondly, that they were in a bad way. Thirdly, I was told that they were in a bad way because, obviously, to some extent they had lost traffic to the roads but that they had lost much more traffic than they need, or should, have done on economic grounds because road transport operated at a great and unfair financial advantage over rail transport.

    I was told that the railways have to maintain their own permanent way, whereas people who journey by road travel on a road which is maintained at public expense. I pointed out that the motorist, at any rate, made his contribution in taxation by the motor tax and through the petrol tax. But while that was true, I was told, the motorist's contribution was not nearly large enough, and road transport was unfairly advantaged.

    I do not say that I agree altogether with that argument. Obviously, when we are talking about fair shares, it is very difficult always to know exactly what is a fair share; but that perfectly honour-able and coherent argument was put before me 10 or a dozen times during the course of the Election. There were only two conclusions that I could deduce from that. One was that it must be the policy of the Socialist Party to subsidise the railways, or it was not; and if it was not, it must be their policy in some way or other to make road transport more expensive—either one must be made cheaper, or the other must be made more expensive.

    We have now been told by the right hon. Member for Lewisham, South (Mr. H. Morrison), that it is not the policy of the Socialist Party to subsidise nationalised industries. If that whole argument was a fair and coherent one—I am not saying whether it was, but it was put forward as such—why is it not a mere act of justice to bring road transport up to a cost which would mean that what is, according to that argument, a reasonable proportion of the nation's business would go back again on to the railways and thus the railways would be kept fully occupied, which it is necessary that they should be for strategic reasons?

    That was a perfectly coherent argument. I did not altogether accept it, although I was interested in it, but I came away with the very definite impression that that was what my Socialist friends believed. If that be so, I cannot see why there is such a fuss now at what the Chancellor of the Exchequer has done, although he has done it for quite different reasons. I should have thought that my right hon. Friend was quite right.

    The reaction this afternoon of hon. Members opposite to the petrol tax is rather curious. I was pleased when the hon. Member for Croydon, North (Mr. F. Harris), made his contribution; at least, he was consistent with a quotation I have from a speech in which I interrupted him two years ago. I do not think, however, that the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), who is not now in his place, is at all to be congratulated on consistency.

    As I said in a previous debate, the noble Lord spoke in 1948 in favour of an increase of 2s. or 3s. in the tax when no proposal to increase it was before the House. In 1951, the noble Lord spoke bitterly—I have a full quotation, but will not weary the Committee with it—against an increase of 4½d. This year, of course, the double somersault has been done, and for various reasons and irrelevant considerations the noble Lord on the side of the Government comes down again for the tax. I said on the Second Reading of the Finance Bill that that shows what a stern unbending Tory can do when he goes in for acrobatics. I think that is a quite fair comment. The other speech we have had in favour of this increase was from the hon. Member for Kidderminster (Mr. Nabarro) and I would ask him to read the speech he made last year.

    The considerations today are quite different from those of last year. To support raising the tax on a commodity with a low price of about 2s. 2d., as I think it was two years ago, is very different from raising it to 4s. 2½d. Whereas last year we were pegging the food subsidies at a cost of £410 million and financing them by a tax on petrol, this year the food subsidies have been cut by £160 million and prices have been allowed to run free.

    Although my opinion on this subject is well known to my party, I think it reasonable to point out that the position last year was very different from that of this year. In case any hon. Member asks why I voted in favour of the tax in the last two years, I would say that that was the main consideration. I still have the advantage over hon. Members opposite that at least I had the grace to keep my mouth shut and I am not on record to be quoted.

    Everyone knows that the petrol tax is inflationary in its incidence. If a tax is put on cigarettes or a bottle of whisky—that may interest hon. Members opposite far more—[HON. MEMBERS: "Oh."]—it interests my hon. Friends as well, but I am trying to get points of agreement—the matter is finished with. But when a tax is put petrol it is completely inflationary. It not only affects the man travelling to work, but the distribution of foodstuffs and a series of commodities which we need. One does not have to state these cases, because they were stated with such coherence and force by hon. Members opposite last year.

    I also find a curious inconsistency here between the fact that this tax is being put on and supported, presumably, by hon. Members opposite, and the statement made by the Home Secretary on Monday on fares. When all is said and done, when we are discussing fares we must bear in mind the considerable time lag by the time procedural steps have started—the application for increase of fares and the inquiry. Those fare increases were based on the price of petrol and fuel prevailing at the time.

    Of course, we run into very different circumstances now and this tends to heighten the difficulty and start another long series of fares increases. I understood, Mr. Bowles, from the Ruling of your predecessor, that it would be possibly out of order for me to go into questions of the Diesel effects of this consideration and I will pass on to other matters, but I wish to say that, of course, it is an element in the general tax we are speaking about today and it is rather difficult to separate it.

    I think it is time petrol was looked on in this country in the same way as coal, as an element in production. I find that 2s. 6d. tax on a gallon for Diesel oil is equal to a £25 tax on a ton of coal. That would mean on the "Flying Scotsman," running to Edinburgh, a tax of £213—£1 per passenger. It seems that road transport is a reasonable milch cow for successive Chancellors, but it is no use hon. Members opposite saying that transport is unaffected by these considerations; they are so much on the record.

    The right hon. Member who led for the Opposition last year, the present Leader of the House, rather sneered at Front Bench Members on our side and indicated that we had a pool of private cars and did not have to use taxis. He went on to refer to the increase in provincial bus rates and things of that sort. It is very difficult to sort out the many pages of quotations one has on this subject but, bearing in mind that we had a debate on Monday evening which ended with the Parliamentary Secretary to the Ministry of Transport speaking, it is reasonable to refer to the remarkable contribution he made to our debates last year. He suggested that this was a food tax and went on to say that it was more than that—the tax on petrol was a contribution towards the sacred cow of the Socialists, British Railways, and an attempt to drive traffic off the roads. That was the sort of contribution we had then.

    It is not only a matter affecting London with which we are concerned, but a matter applying all over the country. There are so many pages of quotations I could use, but I am trying to hurry along. [Laughter.] It is a matter for hilarity, but if hon. Members had taken the trouble to read their own speeches, they would have laughed at the noble Lord and the hon. Member for Kidderminster.

    For the sake of the feelings of the hon. Member and the time of the House, could we have the quotations circulated in the OFFICIAL REPORT?

    That is quite fair, but one has to put them in as evidence and one has to hold them here because one has been waiting to see these hon. Members rise this afternoon.

    If we consider the position of London transport, we find the same sort of thing as in the City of Leeds, which has an estimated deficit at the end of March, 1952, of £322,000. That deficit was based on the old price of petrol and, of course, last year the Elections were largely fought in Leeds on the question of transport fares. Wherever we look we find there are fares applications, and no one really believes that the Government have pushed off the increase of fares by the political manœuvre we saw on Monday, because someone has to pay for those increases in the long run, and they will fall not only on fares, but on foodstuffs and similar things. If the hon. Baronet the Member for Handsworth (Sir E. Boyle) wants all the quotations in a compressed form, he need only read my speech on the Second Reading of the Finance Bill.

    What are hon. Members going to do tonight? Presumably they will go into the Lobby. [HON. MEMBERS: "What you did last year."] I stated the very different circumstances last year. But they will go into the Lobby to put up the price of fares and of foodstuffs. I believe it was the late Earl Lloyd-George who said that they would go into the Lobby like dumb driven cattle. That is an understatement, because cattle are bovine, silly, stupid and obstinate. The hon. Gentlemen opposite represent a far faster type of animal. I believe that, as followers of "Rab," they are rabbits—reactionary rabbits—and that they will go into the Lobby in one big scuttle—a scuttle away from the smell of petrol fumes. It will show that their platitudinous attitude in the last two debates when they were in opposition, and their pranks and platitudes in opposition, were merely show, and the blatant ballyhoo and bombast so characteristic of the back-sliders opposite.

    6.30 p.m.

    I cannot hope to compete with the hon. Member for Leeds, West (Mr. Pannell) in his comic turn, and I should like to bring the Committee back for a moment or two to the tax we are considering. I do not think it does us any good to bandy the speeches of last year, for I, like the hon. Member for Leeds, West was silent last year and nothing can be quoted against me. Speeches can be quoted from both sides of the Committee, but it does not help us.

    This tax cannot be judged in isolation. It is part of the general Budget statement. I would remind hon. Members of a fact which from the tone of the debate this afternoon, one might think had been forgotten. This Budget is in a sense an emergency Budget. Hon. Members on both sides of the Committee have acknowledged the existence of the crisis we were facing. The nation was over-spending at over £500 million a year and our very employment and bread were in danger. That is the situation which this tax is assisting to put right, and I would ask hon. Members to remember that background when they consider this proposal.

    We all agree that taxes are unpopular and we wish that there were no taxes. Some people would choose some form of tax to be taken off and some another, but we could have a marvellous holiday if there were no taxes at all. However, considering the present financial background which we all admit, I would ask hon. Members what alternative they would propose to meet this emergency? The former Chancellor of the Exchequer said last year:
    "I have repeatedly said that the standard of living"—
    that is, of the people of this country—
    "would have to fall."—[OFFICIAL REPORT, 8th November, 1951; Vol. 493, c. 357.]
    Let me repeat that statement.
    "I have repeatedly said"—
    said the former Chancellor of the Exchequer, rather in the line of thought of Sir Stafford Cripps, for which I respect him—
    "that the standard of living would have to fall."
    We have to face the reality of that cruel situation and this is one of the necessary steps that the Chancellor so often and so courageously forecast. I have one or two quotations of his rather leaner and hungry colleague—if I may say that about the right hon. Gentleman.

    Speaking from memory, I think it was in May on the Committee stage of the last Socialist Finance Bill, and, defending the re-armament programme against the Bevanites at that time, the previous Financial Secretary to the Treasury said re-armament could not be completed without lowering the standard of life of our people. Let us admit that this does involve lowering that standard. If hon. Members opposite do not, they are fooling our people and trying to get cheap votes at the local elections by going away from the facts which previously they admitted existed.

    But if hon. Members opposite do not like this form of taxation, or the lowering of the standard of life, what alternative do they choose? Would they rather have a more severe cut in the social services, and if so, where? Would they rather have the whole of the food subsidies removed, or a cut in old age pensions? They admit the crisis is there. This is one of the necessary steps which the former Chancellor said must be taken to meet the crisis. The only point I wish to make is that to look at this tax in isolation is to fool ourselves and to be unjust to the people of this country.

    I wish to bring the discussion back to agriculture and illustrate the effect that increasing the petrol tax will have, and will continue to have, on the mechanisation of agriculture throughout the United Kingdom. There are about 350,000 tractors in the country and approximately one quarter of them are driven by petrol. Considering the advances which have been made, particularly in the last few years, regarding Diesel tractors, this is a very high proportion, but there are two explanations. One is not very serious, but is an illustration of the initiative and enterprise of the farmers of our country.

    It will be remembered that during the war a new petrol-driven tractor was produced. It was popular among farmers because they found that if they got one and put it away in their barn and did not use it, they could convert the petrol coupons which they got for it to other purposes. There was a rush to buy this particular tractor which was at least satisfying to the sales manager of the company producing it, and which was stopped only by the introduction of coloured petrol.

    The other reason, which is much more serious and important, is that the petrol-driven tractor is efficient. It has a higher ratio of efficiency than the tractor driven by paraffin vaporising oil. The draw-bar power is greater and its high thermal efficiency is undoubted. It is more economic, because the amount of lubricating oil used is not so great as with the paraffin vapourising oil-driven tractor.

    The cost of running these petrol tractors has now become prohibitive, with the result that the small farmers, who, it is said, are now being recouped for these increased prices by the new price review—a statement which we are quite incapable of checking, because we have not yet seen the details on which the farm prices have been awarded and will doubtless have to wait another three weeks for them—these small farmers are finding that the costs are really quite prohibitive.

    I should like to give the Committee some examples. I assume that a petrol-driven Ferguson tractor, which is used very largely by small farmers, is operated for 10 hours a day for five days a week, and, on the basis of the petrol tax being 2s. 6d., it costs in a year £325 in tax, which is the equivalent of another driver, who never drives the tractor but who is on the wages list. That means £6 5s. a week in tax for running a tractor of this kind, and the recent increase of 7½d. in the tax on petrol amounts to £80 a year or 30s. a week in additional taxation.

    With what result? With the result that the sale of petrol-driven tractors, which have a higher efficiency and should be encouraged, is being depressed, and that agriculture has to turn over to paraffin vapourising machines, which are not so competent. The result is that a premium is being placed on inefficiency and more work is being put on the driver of the tractor, and this is a burden which the small farmer, trying desperately to increase his productivity, is finding a very serious one.

    The small farmer is also dependent on stationary engines, of which there are hundreds of thousands throughout the country. They perform all sorts of jobs, and particularly they are used to drive milking machines, and are playing a great part in this drive for the mechanisation of agriculture. I find that 93 per cent. of these stationary engines are on small farms, and we can easily envisage the situation of a small dairy farmer who has a dozen cows, which is somewhere round the average, and who is selling 20 gallons of milk a day. Under the price review, he will get another 2s. 6d. a day for his milk, and it will cost him 7½d. more, or 25 per cent. of that increase, in increased petrol tax alone. It is a burden on him, and it is unthinkable that it should be forced upon him at this particular time. He cannot turn over these stationary engines to other fuel. So it goes on right through farming and agricultural machinery generally.

    I wish now to refer to the combine harvester, and I have two of them. I have one with a 12-foot cut and another with a 8 ft. 6 in. cut, and they do approximately the same job in the same time. The extra tax on each of these, on the basis of cutting 25 acres per cutter-bar-foot, is £15 12s. 6d., or over £31 for two petrol-driven combine harvesters that will not work so efficiently on any other fuel.

    This direct charge on agriculture has a double effect. It costs the industry a lot more money which it should not have to pay. I understand that the Chancellor expects to get from agriculture £2.2 million more from the oil tax this year. But it also drives the farmer, and particularly the small man, to use a substitute for the petrol engine which is not as efficient and effective as the petrol-driven machine. At a time when manufacturers are trying to standardise the production of tractor motors so as to use them either in motor cars or tractors, their efforts are being frustrated, because the farmers are being driven into using second-best alternatives.

    It is for these reasons, and because I know that the Chancellor has the interests of agriculture so much at heart, that I ask him to look at this matter again, in order to see if some more attention cannot be given to the situation of the smaller farmer and some assistance given to relieve him of this unnecessary burden.

    6.45 p.m.

    I wish to draw the attention of the Chancellor to what I think is an alternative method which we might consider in connection with this petrol tax. It is a lot to ask the Chancellor to give way when he has given a great deal of thought to the matter, but, nevertheless, last year, we said that this tax was going to put up the cost of living, and there is no doubt that it will. I did not speak in the debate last year, but I shared the views that were held at that time.

    There is no doubt that, if we have this tax on industry and on transport, it will increase the cost of living. I know that the Chancellor has his difficulties, now that we are not getting any oil from the Abadan refineries—we have heard about that in full measure—and that he has to save dollars and raise money to pay for the social services which the country wants and for which hon. Gentlemen opposite press so strongly. But why put up the cost of living by imposing this tax on transport and industry?

    Could not my right hon. Friend allow, with reasonable safeguards which the Treasury would soon be able to devise, a method whereby industry might claim back either the whole or a portion of the tax against the receipts for the amount of petrol which they have bought? The public would then pay the tax on pleasure petrol, and industry would get a rebate on the petrol used for necessities. Such a method would also obviate the necessity of a return to red and white petrol, which would be deplorable. I feel that the Chancellor, with his ingenuity, could easily find some way of allowing such a rebate.

    I should also like to see some concession made in regard to the use of hydrocarbon oils in the cleaning industry, because the new tax will increase the cost of every article which is cleaned in this country. We want to save our clothes, and avoid having to buy clothes more often, because we are trying to economise in this country today, but if we put this tax on dry cleaning it will mean that people will not be able to have their clothes cleaned as often as they have been doing, and we all know that clothes deteriorate if allowed to remain dirty, and that grit and other matter wears away the wool.

    If we cannot find a way of alleviating the burden of this tax on that industry, we shall be contributing towards a rise in the cost of living, and I would invite my right hon. Friend the Chancellor, when he replies to the discussion, to try to find a way of compromising or removing this tax from this industry, while leaving it to apply to all pleasure petrol.

    I have listened with some interest to the cross-debate that has been going on, and I have noted how one side of the Committee has reminded the other of what was said and the arguments used during the debate on the last Budget. Fortunately or unfortunately, as hon. Members may look at it, I cannot say that I either spoke or voted one way or the other in that debate, because I was not in this House.

    I was, however, in this House between 1945 and 1950, and I was very interested to note then how the Opposition tried to extract from the Chancellor of the Exchequer the maximum of concessions concerning the things in which they were primarily interested. If I do not touch at length on the question of fares, it is not because I am not very much interested in the matter. As a matter of fact, during my recent connection with Post Office workers, I was particularly struck by the hardship which the imposition of higher fares is bound to have on the cost of living of the men and women in that great public service, especially those on the basic scales and those on the lower incremental scales.

    There is no doubt that in due course the transport authorities, the omnibus companies, and others will inevitably be bound to increase their fares as a result of this higher taxation. I am perfectly satisfied—and I have no doubt that many hon. Members on both sides are also—that we have practically reached the limit of what we can enforce upon men and women by way of higher travelling costs. I think we are all satisfied that we have reached a point where real hardship is being imposed owing to these increased fares.

    I know of young people in the outer London area who have to travel to London every day to work, and I know that higher fares are imposing great hardship on them. They are having to go without some of the essential things in life in order to pay the increases. Having said that, I will leave the question of the Petrol Duty in relation to fares and make one or two suggestions in connection with the light hydro-carbon oils used in industrial processes.

    In referring to this subject, I want to mention a deputation and talks I have had with representatives of the interested trade unions and with managements of a number of industries in my constituency, who have assured me that they will come up against very real difficulties if this increase to taxation is imposed upon them. One of the industries concerned is the rubber proofing industry which uses such oils a good deal in its rubber solutions, and so on. Another firm is connected with the paint and varnish industry. The representatives of both these firms and of the trade unions concerned assure me that if this taxation is imposed it will result almost inevitably in unemployment in their industries.

    I know that the Chancellor is fully aware of the situation in Lancashire, and there is no need for me to develop at any length the position of industry in that county. As far as textiles are concerned, we have had a tremendous increase in unemployment in my constituency. The Chancellor knows of certain firms in that area who are being hard put to it to retain anything like a skeleton staff in their establishments.

    We have had a debate on the broad issue of textiles, but the point I want to put to the Chancellor this afternoon is that I hope he is not going to make it difficult for some of the smaller firms in that area to carry on. Some of them are trying their utmost at the present time to retain staff, although, because of the deterioration in trade, they could very well dispense with their services. But they are trying, nevertheless, because of the peculiar unemployment situation in Lancashire, to retain their employees in the hope that better times will come.

    There are three arguments which I want to adduce in support of the suggestion that the Chancellor might like to have another look at this question of light hydrocarbon oils. I understand that quite a number of Government contracts are already involved in come of these industries, and we are not unhopeful that there will be many more which will come within the ambit of the £20 to £25 million about which the Chancellor was talking in regard to the defence programme.

    It seems to me that, if imposed, this tax will act as a sort of boomerang. The country will not only be paying it on the ordinary materials produced, but also on Government contracts. In the second place, I am assured that there will be a tremendous adverse effect on the home market. As the Chancellor knows, the pipelines in Lancashire are very full indeed, and although many of the manufacturers are trying to sell at under cost price at the present time they are still finding great difficulty in getting rid of their goods.

    Therefore, even from the point of view of the home market, it seems to me that there is a case for a review of the matter. But more important, possibly, is the fact that our industries will be up against almost impossible competition in the field of exports unless something is done about this tax. In a pamphlet which has been sent to me, and which I have discussed with representatives of the firms I have already mentioned, it is stated that most other countries with whom we are in competition regarding rubber proofing, paints and varnish, and so on, have already given very substantial remissions of tax in order to allow their industries to compete much more favourably with our industries in the international market.

    The pamphlet says:
    "It is significant that Italy and Western Germany, now recovering their economic freedom and capacity to compete with the United Kingdom in overseas markets, have both granted a preferential rate of duty on light oils used by their industries."
    The fact that these countries have taken this step at the first opportunity demonstrates the importance they attach to the freeing of their industries from unnecessary impediments. Not only have countries in Europe and Scandinavia done this, but I understand that many of our Commonwealth countries have done exactly the same thing.

    Therefore, for those three considerations—Government contracts, the home market, and, above all, our competition in foreign markets—I feel that I am reasonable and rational in making my suggestion to the Chancellor. I always feel sorry for Chancellors, whatever their political colour, because they have to find the money, and everybody wants them to find it in a way which will not affect them. But the imposition of this tax will accentuate still further the rising cost of living of our people, and I feel certain that the Chancellor would not wish to do that.

    As I said at the beginning of my speech, there comes a point where some of these things defeat the very object that he has in mind. I feel certain that this increase in the Petrol Duty is of that nature, and, therefore, I ask the Chancellor to review in whole or in part these proposals in his Budget in the interest of the industries to which I have referred.

    7.0 p.m.

    Before coming to the question of the increase in the Petrol Duty, I want to answer one or two of the points put forward by hon. Members opposite. It was only on Monday that we had a debate on transport and fares, and hon. Members were saying that something must be done to prevent road transport, both of freight and passengers, from competing unfairly and unduly with the railway. Will not this duty do exactly that?

    Those who travel by roads at fares very much cheaper than those which prevail on the railway must realise that buses and lorries are having their permanent way kept for them. Admittedly they pay their ordinary licence duty, but that is an infinitesimal amount compared with the cost of upkeep of roads and bridges. Vehicles on the roads also have all their signalling and traffic control done for them free of charge and it must be realised that they should bear some of the burden of our present adverse balance and their customers should not grumble too much.

    I am not absolutely certain, but I think that one can travel from Newcastle to London on a passenger bus for approximately half the fare on the railway. I say "approximately" because I am not going to be tied to my figures. Even if road passengers had to pay something a little nearer to the railway fare than half they would still not be doing too badly.

    One of the reasons my right hon. Friend the Chancellor gave for the increased Petrol Duty was the need to economise in dollars and to reduce the import of petrol to this country. I very much wonder whether that is really a valid argument. By how much will petrol be cut? There may be some cutting down on pleasure motoring but if that were eradicated altogether it would represent in terms of petrol a virtual drop in the ocean; and road transport must go on. This duty will not cut down the number of buses and lorries, and therefore I cannot see that it will mean much saving of petrol which comes from the dollar market.

    It is the same old story of dealing in isolation with one aspect of our problem. There is a vast problem to be solved and we have gone a certain way towards solving it. But we have not yet heard on either side of the Committee what is the real solution. I am not an economist nor have I financial brain, but I hope this country will produce a big enough financial brain to solve this obvious problem of the vicious circle of wages and prices chasing each other. I have not known a single Chancellor of the Exchequer who has said, "We will cut into the circle by this means" and then broadcast to the people of the country and told them what he is doing.

    These palliatives are of no use. We are suffering from an acute disease—it may be appendicitis or something worse—and we are taking aspirins for it. I admit that this Budget was brought in very soon after my party came into power. It is a short-term emergency Budget but in the long run, and as a long-term measure, I hope that we shall have from this side of the Committee some proposal that really will solve our problem. I am certain that the workers and managers in industry would do anything provided they could see an end to it and see the light over the hill again.

    If the Chancellor got up and said, "Do this, and in three years time we shall be square" he would have everybody with him. Incentives are all right in certain industries but it is no use providing a man with an incentive if he knows that the raw materials are not available or that the warehouses are filling up, and that his employer, despite the best will in the world, will have to reduce his salary. It is no use asking the girls to work another half-hour during lunch time in those conditions.

    The hon. and gallant Member is going rather wide of the Petrol Duty.

    I beg your pardon, Mr. Bowles. I quite agree, but the Petrol Duty is part and parcel of this big problem.

    This debate differs from many others through which I have sat in the hope of catching the Chairman's eye inasmuch as in other debates previous speakers have always dealt with points that I proposed to deal with and have made them one after the other. In this debate the contrary has happened. So many points have arisen that successive speakers have had increasing material on which to speak. But I must resist the temptation of dealing with the general points and confine myself reluctantly—though perhaps I should say gladly—to the small point of the effect of this duty upon the native oil industry of this country.

    It has been mentioned already by my hon. Friend the Member for Midlothian and Peebles (Mr. Pryde), who shares with me the representation of the two constituencies which house our native oil industry. It is a remarkable industry which has had many setbacks and has survived fierce and often unfair competition, and has been subjected to many kicks, some of them in the teeth. Any less resilient industry would have folded up in the face of its repeated difficulties.

    We should be grateful that the industry has survived so sturdily today and I am honoured to put up a small plea for special consideration and protection for it. Most of this country's shale oil mines are in my constituency. Hon. Members who have travelled over the Forth Bridge will have seen flat-topped red hills which are like miniature editions of Table Mountain except for their colour. They mark the shale mines. Oil was being produced from them 100 years ago, eight years before the first oil well came into production in Pennsylvania. Production in America almost killed our native shale industry because of importation from the much more prolific American oil wells.

    Now I ask the Chancellor of the Ex-chequer to recognise the poetic justice of protecting this industry and, if possible, nurturing and developing it. My hon. Friend the Member for Midlothian and Peebles had other things to say about its history. I am more concerned with the figures of its present production, which is about 1,500,000 tons, from which in 1951 we produced about 105,000 tons of crude petroleum and about 100,000 tons of refined products.

    But this remarkable industry does not waste anything. We have heard of the economics of pig breeding in which everything is used except the squeal. The Scottish shale industry has a similar record. From its operation we run sulphuric acid works, a candle factory and a brickworks, and we are concentrating attention on motor spirit, solvent naphthas, deisel oil, paraffin wax and synthetic detergents. This country would not get any of the those commodities elsewhere without the expenditure overseas of valuable capital.

    The industry employs 4,000 of my constituents. It has moved with the times. It uses the most modern retorts; it uses electric power for drilling and for transportation of the shale. It has installed the most up-to-date safety devices in its winding machinery. It operates its own refinery. Yet production today is confined to only 11 shale mines. It is not my purpose in this debate to ask for expansion and development—it would be out of order if I did so—but that will perhaps come on a later occasion.

    Are those mines State-owned or are they under private enterprise?

    I have already paid my tribute to the management of those mines. I will have a talk with the hon. Member about that point later. It is my purpose to plead for practical assistance which the Amendment standing in the names of some of my hon. Friends and of myself would give if it were agreed to. I hope that the plea has not fallen on deaf ears.

    It is a small step for the Chancellor to take. It is a concession which he could make. I believe it is possible; I do not think there is any international difficulty arising from G.A.T.T., and I think that this is a richly deserved encouragement which the Chancellor should give to this industry in my part of the country which has pioneered world oil production—this valuable national asset. In doing so he would be helping not only my constituents but the whole country.

    We have had a debate which has lasted from 3.30 this afternoon and we have listened to some 25 speakers. I think this presages well for the future progress of the Bill because the atmosphere has been one in which I think hon. Members have attempted to put forward constructive points very largely from the angle of their own constituencies or, at any rate, from the angle of their own anxieties. I shall do my best, in a short reply, to answer some of the points raised.

    Under the direction of your predecessor in the Chair a few minutes ago, Mr. Bowles, it was understood that this would be a general debate to be followed by rather shorter debates on the Amendments. I think it would be for the convenience of the Committee, therefore, if we could now come to a conclusion on this general debate, because there are so many other points to consider. The Government are not trying to be unreasonable in launching themselves slowly on the Finance Bill in the company of the Committee, but it is reasonable to say that we should cover the whole subject of hydrocarbon oils and so forth in the course of today's sitting without keeping hon. Members too late and with proper consideration for the problems of transport and so on. If we can bring this general debate to an end fairly soon, we can then get on to the Amendments and we shall have shown people here and outside the House that we can conduct our business in the right way if we want to.

    The debate has been severely practical. There is one matter that I should like to tell the Committee first of all, and that is that I am putting on the Order Paper a very simple Motion about bringing up a particular Schedule to discuss it with the Purchase Tax Clauses. I am only giving warning of that so that hon. Members may know that when we reach that point in about 10 days' time or so, they will feel that they have been warned about it, as many of them have been privately. The sole object is to bring the whole of our discussions into one and to make it as businesslike as we can. Every opportunity must be given to hon. Member to put their own constituency points of view.

    I cannot deal with all the points raised, but may I first of all deal with the question of the shale industry, which was raised by the hon. Member for West Lothian (Mr. J. Taylor) and which was dealt with at the beginning of the debate by the hon. Member for Midlothian and Peebles (Mr. Pryde). As those hon. Members will know, there is at present a preference on excise for the home industry, and I would remind them of the benign and, I believe, useful provisions of the Finance Act, 1950, namely, Section 2 (1) (a) of that Act, which permit the amendment of the margin of preference for the home industry if a case is made out. I do not on this occasion say that a case has been made out; and, in fact, despite the sincerity with which the case has been put, I would not say that the industry is in very great difficulty or danger as a result of this move, or indeed of any other.

    But I would say that if hon. Members feel genuine anxiety, and if they are so advised, they can always remind their friends in the industry that there is the possibility of putting their case to the Treasury and the Customs and Excise, and there is the possibility of amending the preference by Order. There is an opening for them if they feel genuinely aggrieved. I repeat that I do not think that their noble industry, which they have described with such emotion and clarity, is suffering to the extent that they imagine.

    I will come to the right hon. Member for Battersea, North (Mr. Jay)—our modern Cassius according to one intervention in the debate—during the course of my remarks. There are one or two other hon. Members who have raised particular points. There is, for example, the hon. Member for Norfolk, North (Mr. Gooch), whom I am glad to congratulate on becoming Vice-Chairman of the Norfolk Council Council. I hope that he will carry out those duties with the same distinction as we associate with him here. Then there is the hon. Member for Deptford (Sir L. Plummer) who has the honour and dignity of living in my own constituency.

    Both hon. Members have referred to the case of agriculture. No doubt this may come up later in the evening, but I would remind the hon. Member for Deptford—as I believe he knows, since he mentioned it in the opening part of his remarks—that full account has been taken of the incidence of the rise in the cost of petrol in framing the price schedules which have been announced. That is the answer to all those who are geuninely interested, as I am myself, in the agricultural industry. I therefore believe that those machines which cut the swathes in my constituency need not be overburdened by the action which their own Member has taken.

    7.15 p.m.

    There are one or two other hon. Members who made useful interventions. I was somewhat concerned, and charmed, by the intervention of the hon. Member for Bristol, South (Mr. Wilkins), who said that he had not been able to speak in the House since about 1946. I can only say that a change of Government has certain advantages. The hon. Gentleman is relieved from the odium of being a Whip, and is able to take part in the deliberations in this Chamber with more freedom. I was concerned to hear that in order to keep his car going and to pay me the Petrol Duty, he is obliged to give up smoking, and as these two taxes are great competitors in the Revenue, I would only ask him to exercise greater moderation in both ways and to use a little less petrol and to continue smoking more heavily; then I shall feel very happy at the thought that he is not only speaking well in this Chamber but he is also contributing his due share to the Exchequer.

    The hon. Member for Devizes (Mr. Hollis) mentioned the railways at Swindon. I will not go into those arguments today, but there is something in the general argument that there must be an equal sharing out of burdens, if possible, between road and rail. The hon. Member for Woodside (Mr. W. G. Bennett) and one or two other hon. Members, including my hon. Friends the Members for Croydon, North (Mr. F. Harris) and Dorset, South (Viscount Hinchingbrooke), were anxious to know what the duration of this tax is likely to be. I feel complimented to think that, in the eyes of these hon. Members, however critical they may have been on other matters, I have before me a very long tenure of office. I only hope that before my long tenure of office is concluded some adjustment can be made in this tax. If, on the other hand, by their anger my tenure of office should be in any way shortened, I shall be unable to meet them in any way.

    Hon. Members have expressed a genuine anxiety about the incidence, of the Petrol Duty, and this was summed up in a rather dramatic way by my hon. and gallant Friend the Member for Worthing (Brigadier Prior-Palmer), who did not seem to like the tax or my policy in any way at all. I would draw his attention to the very weapon to which the right hon. Member for Battersea, North, referred with such disdain, namely, the Bank Rate, which he alleges is costing us £70 million a year. If he refers to that measure for the purpose of any forthcoming speech which he may make, he will realise that with its help and in other ways, some of them orthodox and some difficult, we have managed—I say this in all seriousness—greatly to improve our external sterling financial position. We have, by methods such as this, to which I will come in more detail, managed in six months to staunch the flow of blood which was threatening the very existence of this island, and which we must all acknowledge whatever our views may be. Therefore, when criticisms are made of the Administration, I hope it will be realised that we have tried to serve our country and that so far our efforts in this direction have been crowned with a certain amount of success.

    Why, then, was it necessary to introduce this tax? I hope that I am a healthy Chancellor of the Exchequer when I say I regard all taxation as bad. There are only different degrees of evil in the incidence of any particular levy. This particular tax has the advantage of being—and I use words which I hope are familiar to the right hon. Gentleman the Member for Battersea, North—thinly spread and widely borne. When the right hon. Member for Leeds, South (Mr. Gaitskell) was asked to publish his extracts from our speeches in the OFFICIAL REPORT, I would only remind him that there is no need to quote extracts from speeches of hon. Members and right hon. Members on this side of the Committee in favour of the petrol tax; I can simply refer to the bound volumes of debates last year and I can quote from them one or two extracts of speeches from hon. Members opposite in favour of a petrol tax, although perhaps at a lower rate than this.

    I have the assurance of hon. Members opposite that this tax is good because it is thinly spread and widely borne. The real reason for having had to turn to this tax was hinted at by me before the Budget, in my two statements of November and January, and was then further alluded to in the Budget statement. It seemed to me at that time—and no argument has prevailed which has countered that view—that it would be wise to try to relieve the strain upon the oil position.

    I go back to the statement made by the right hon. Member for Battersea, North—who is very helpful to me today. These are his words:
    "… some restraint on the less essential uses of an imported commodity … is necessary on the grounds of general national economy."—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 882.]
    If that was true before the crisis which broke over this Government when we took office, surely it is even more true today. That is a further answer to the hon. and gallant Member for Worthing who is anxious, together with some of his friends—and quite reasonably—about the incidence of this tax. Increased savings in our foreign exchange will result from the duty only if there is a reduction in consumption. At the same time, if we cannot get a major reduction in consumption—and it certainly did not look like it during these last Easter holidays, at any rate from the point of view of the ordinary motor car users—we can at least impose some check on future growth.

    I would remind the Committee that when I spoke in January I did consider the possibility of a rationing scheme for petrol. That was the scheme to which my distinguished and much lamented predecessor, Sir Stafford Cripps, had to resort in a period of similar crisis: but I decided, I think rightly—and I hope the public will give credit for this—not to reintroduce petrol rationing. It would not have brought in sufficient saving. It would have cost us, in administration, some 2,500 people to work it and it would probably not have brought in sufficient saving despite the great effort to work it absolutely fairly.

    Therefore, I fell back on an increase in the tax on petrol. Various hon. Gentlemen have raised the question whether there is any genuine justification for a Chancellor of the Exchequer deciding to impose an extra tax on petrol. There appears to be some misunderstanding about the precise significance of oil in the United Kingdom's balance of payment. The position is roughly this: a large part of the petrol and other light oil, and the heavy oil used in road vehicles, comes from refineries in the United Kingdom belonging to British-controlled or American-controlled companies. The balance is imported from refineries overseas, some of which are operated by British companies and others not; but all these oils, to a greater or lesser degree, cost this country some foreign exchange.

    Where the oil is refined in the United Kingdom, the foreign exchange cost arises in respect of crude oil and also in the net profits earned by the American companies, where they do the refining. With oils refined by British-controlled companies overseas there is a large element of foreign exchange involved, both in producing the crude oil and operating the refineries. The hon. Member for Kidderminster (Mr. Nabarro), in a characteristic and excellent speech, referred to the increase of dollar content in the general oil transactions. It is very difficult for me to give precise figures, but I can refer the Committee to the Economic Survey, paragraph 25 of which says:
    "Purchases of dollar oil to replace Persian oil have been costing the sterling area in this initial period over £100 million a year, the greater part of which is reflected in the United Kingdom's invisible account."
    As the hon. Gentleman will know, there are certain drawbacks from this which bring it down by at least £25 million, because the adjustments we used to make with the Persians are no longer made.

    It has been absolutely just for hon. Members on this side of the Committee to refer to the loss of Abadan. Leaving aside all the political aspects, the loss of Abadan from the point of view of this country has been a very good reason for approaching this tax in a more co-operative and understanding spirit than has been shown hitherto.

    The last thing I wish to say on the subject of oil—without twisting the tails of right hon. Gentlemen opposite any further on the subject of Abadan—is that any marginal placing of our purchases over and above what we are getting now, were consumption to have risen, would have fallen 100 per cent. on our foreign exchange. Our purchases from Europe are paid for 80 per cent. in gold at the present time and so there is surely a reason, on the foreign exchange front, for taking care about oil.

    In relation to the home front, hon. Members opposite have criticised the tax for various reasons connected with the cost of living and the raising of manufacturing costs. For private car users the increase will raise the cost per mile of the small car, doing about 30 miles per gallon, by ¼d. per mile. The larger car, doing 20 miles per gallon, will cost three-eights of a penny more per mile. For commercial users I calculate—and I have always tried to be fair in giving the Committee the figures—that the cost will be increased by about 3½ or 4 per cent.

    It has been said that that will automatically mean a rise in fares. I do not believe that. I know that extra costs sill be incurred because the fuel will cost more; but I am very glad to see that the Chairman of the Road Haulage Executive has announced that the Executive will try to keep the position as stable as possible and it is not intended to increase the rates, at any rate for the time being. That is a very statesmanlike approach by the Executive, despite the burden which I have undoubtedly put upon their shoulders. That is the right spirit in which to take this rise.

    When one reflects that, on the average, public service vehicles do about 10 miles to the gallon, so that the incidence of the increased duty works out on an average at ¾d. per vehicle per mile, I do not believe that it necessarily must mean a rise in fares or a rise in charges at the present time. At any rate, whether or not it does, I welcome the statesmanlike spirit in which the Executive have approached this matter and I hope we can all approach it in that spirit.

    The representatives of the bus organisations, on the other hand, have said that it will definitely mean a rise in fares.

    I think that is so, but I have not that particular reference with me.

    The right hon. Gentleman raised the question whether the cost of petrol at home was greater than the cost abroad. I notice that last year he said that foreign costs were greater than ours, and in speaking this year he said he thought they were less. I have obtained the figures for the capitals because I do not think it is fair to take the figures in a difficult constituency like that of the hon. Member for Orkney and Shetland (Mr. Grimond), where the cost is higher—and I sympathise with the hon. Member's difficulties and I feel sure that, on resuming my seat I shall have his support.

    7.30 p.m.

    The figures in the capitals are these. In London, it is approximately 4s. 2¾d. a gallon. In Brussels, it costs approximately 4s. 4d. a gallon, namely, more; in Berne, 4s. 8d. a gallon; in Paris, 5s. 7d. a gallon; in Rome, 6s. 8d. a gallon; in Oslo, 4s. 2d. a gallon—approximately the same; and in Helsinki, 4s. 11d. a gallon. The only capital where the cost is appreciably lower is Stockholm where the cost is 3s. 4d. a gallon. That is some indication that, compared with a great many capitals, our costs are still lower, despite this increase in the Petrol Duty.

    In the case of the United States, of course, the cost is very much less. I calculate that it comes out, at most, at 2s. 2d. a gallon. In the case of some of our Commonwealth friends overseas, like New Zealand, the cost is definitely less. For example, in Canada it would be 3s. 3d. a gallon and in Australia I calculate that it would be about 3s. 4½d. a gallon. In comparison with the figures for many other capital cities this, therefore, is not a tax the incidence of which need be feared as being dangerously heavy.

    I will refer only in passing to the tax on paint and other constituents, which will no doubt be raised in later Amendments, and I will conclude by saying that this tax is an integral part of the general scheme of the Budget—a scheme which has commended itself to the country as a whole. This tax was conceived in a spirit of national duty because I thought it had some reference to the external position, as I have tried to show it has. I hope that the human effects of this tax, which is one of the very few taxes I increased in my Budget, will not have the bad human, industrial or other results which hon. Members fear.

    I am glad that the Chancellor of the Exchequer is pleased with the progress which we have made and with the temper of the debate so far. I can assure him that so long as he gives us adequate time to discuss Amendments, and makes reasonable concessions from time to time, the temper will continue to be very good. I will also say that his proposal, as I understand it, that the Schedule to the Purchase Tax Clauses should be taken with the Clauses, is not one to which we see any objection. I must, however, point out to him that this matter of the Purchase Tax is one in which I think hon. Members in all parts of the Committee are closely interested, and I hope he will be prepared to give us plenty of time to discuss the rather large number of Amendments on the subject.

    The reception by the right hon. Gentleman's own supporters of this tax has not been exactly enthusiastic. Of course, they were in a difficult position. Either they had to admit that they were wrong in what they said last year or they were more or less obliged to attack the Government this evening. Some of them tried to find a third way out by gymnastic contortions in which I do not think they were very successful.

    It has been said that we should not be bothered with quotations from what was said last year and that, after all, it is rather a sterile business; but I do not share that view. I think it would make things far too easy for right hon. Gentlemen if they were never to be quoted in the next year, or the year after if it comes to that—and I say that meaning all sides of the Committee. It may be that hon. Members who sit on the back benches opposite can say, "Well, after all, we may feel bound to support the Chancellor of the Exchequer but we were not responsible for this tax; there is some excuse for us." But I do not think that can be put forward as an excuse by right hon. Gentlemen sitting on the Front Bench.

    I do not want to go in for a long list of quotations, but I think I am entitled to a small ration here, and I propose to quote only three right hon. Gentlemen—all of them very important Members of the Government. The first is the present Secretary of State for the Colonies. Nobody can say that he was an unimportant back bencher. He led for the Conservative Party when they were the Opposition. It was even rumoured that he might become Chancellor of the Exchequer. In these circumstances it is perhaps as well for him that he did not. Nevertheless, we might have a look at what he said about this tax—and this was in 1950 when we were putting it up from only 9d. to 1s. 6d. instead of to the half-a-crown which it has now reached. He said:
    "there are massive trade reasons which make this duty thoroughly unsound. It will raise the cost of production and the cost of distribution, for example, by increasing fares all over the country and by making the transport of components within the various assembly plants in industry more expensive."
    A little later he said, and nobody will disagree with him:
    "Only by lower costs are we going to maintain even our present standard of living and break into new export markets. The exhortations are so familiar that I need hardly repeat them. It is only when it comes to action that these exhortations are seen to be mere words. They are mere lip-service to an idea."—[OFFICIAL REPORT, 14th June, 1950; Vol. 476, c. 228–229.]

    If so, it is a little difficult for the right hon. Gentleman to reconcile it with his position of Secretary of State in this Government.

    I come to a right hon. Gentleman who must, I imagine, have been very much concerned with the decision to impose this tax—the President of the Board of Trade. It is true that he did not sit all the time, or indeed most of the time, on the Front Bench when the present Government were in Opposition. Nevertheless, he took a prominent part in debates on transport. It may be that he had the idea that he might become Minister of Transport, even if he did not know he was going to be President of the Board of Trade. What did he say? He is very flamboyant. He said:
    "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. 269.]
    "Vicious" is a word which I notice hon. Members opposite were very fond of using in those debates, although they have not gone as far as that this afternoon. The whole tone of their speeches has been a little muted and altogether in striking contrast to what they said last year.

    I come to one other quotation, this time from the present Leader of the House. In the debate which we had last year he was leading for the Opposition, too. There could be no possible excuse that this was just an individual point of view; he was speaking for the Conservative Party at that time and his speech struck me, as I read it through, as a remarkably effective one which will well repay further examination. I cannot quote all of it, but I should like to take one passage in which he said:
    "Surely, the whole idea is that one should move goods and people about this country as cheaply as possible, and not use this industry as a source of revenue."
    He went on to say—and this is particularly interesting:
    "I know that the right hon. Gentleman argued before, 'Oh, yes, there always was a petrol tax.' That is true. I concede that argument, but it does not follow that we all approved of it by any manner of means."
    I thought that was rather a nasty crack at the present Prime Minister who brought it in. He went on to say:
    "There is a very big difference in the considerations which apply if we have a small tax and if we have a high tax. A very small tax in a period like that when it was originally put on, when there were great reserves of taxable capacity"—
    and we remember that phrase "reserves of taxable capacity"; it was used a good many times in our debates—
    "is quite different from putting on within 12 months 1s. 1½ a gallon when we have no reserves."
    The right hon. Gentleman ended his speech by saying:
    "But we had 9d. last year … and it is the cumulative effect that matters."
    He ended his speech:
    "I do not like using the old proverb about the last straw, but the right hon. Gentleman must be sure that there is a time rapidly coming when the last straw is going to make all the difference, and perhaps he is getting to that stage now."—[OFFICIAL REPORT, 5th June, 1951; Vol. 488, c. 824–6.]
    Well, he has well passed it by now.

    I feel that we are entitled to draw attention to these statements by leading members of the Government when they were in Opposition, because it really is a bad thing for our democracy if party leaders get into the habit of saying things in opposition and then completely reversing them when they get into the Government. I can well understand that hon. Members are waiting to hear what I am going to say this time, but there is a really important difference here.

    Here are the members of the Government now supporting a higher tax when they said all those things I have quoted about a much lower tax. It is another thing, of course, for us to be accused of opposing a higher tax, and being told we are inconsistent in that. I think myself that we are perfectly justified in taking this line, because, after all, we admit, we agree, that last year the increase in taxation was justified. But that does not mean that we must accept any increase in the same tax the Government choose to put on in future years. That would be an absurd argument. What is really quite untenable is opposition which objects to a lower tax and then supports a higher one, and it is on this ground that we think this inconsistency really is something that must be exposed.

    I do not know whether the right hon. Gentlemen now think they were wrong when they made all those remarks, or whether they still admit that those consequences follow. I have been asking myself how they could possibly resolve this difficulty. Of course, one obvious matter for inquiry would be whether there had been any change in the external circumstances which would, perhaps, make rather less important the adverse—the devastating—consequences which they forecast last year and the year before. Let us look at that.

    There have been, I think, three major criticisms that have been made of this tax in the past—first, that it was damaging to our export trade; second—and this point, rather curiously, has not been referred to at all, I think, in the debate today—that it would be damaging in particular to the production of the right sort of motor car for export purposes; and third, that it was increasing the cost of living and adding to inflation.

    Well, can we really say that we do not need to worry about the export market? Is it not really the case now that we have a tougher job, because we have to increase our exports to the dollar area, than we had in the past, and, indeed, that the whole atmosphere in which our exporters have to operate is now, unfortunately, much less favourable than it was a year or two years ago? I think that that is undoubtedly the case. We have, in other words, got to face fiercer competition now than was the case in the past.

    It is sometimes argued—hon. Members have argued it here—that it would not have been a bad thing in the past had we charged more for our exports. It is, I think, true of some industries and untrue of others, but what is, I think, perfectly clear is that it is not nearly so much the case today as it was last year.

    Then, as to car design. I am bound to tell the Committee that when we were considering the Budget last year we naturally took into account the possible consequences of an increase in the Petrol Duty, and we were concerned lest the increase, or any substantial increase, would have an adverse effect on that particular point. I remember the hon. Member for Edgbaston (Sir P. Bennett), who is now the Parliamentary Secretary to the Ministry of Labour, making a very powerful speech about this then—or the year before. There is a real danger there that if, in fact, the price of petrol becomes as high as this it will be extremely difficult for manufacturers to concentrate on producing the rather medium and larger sized cars which, we know, do best in the export market.

    7.45 p.m.

    As for the cost of living, I do not imagine that anybody on those benches opposite is going to say that that is a less serious problem today. It is true, of course, that the Government have more or less given up attempting to do anything about it. Indeed, by cutting the food subsidies they have, of course, deliberately increased it. But still it remains as true as it was then—indeed, truer—that an increase in the Petrol Duty, and the increase in fares which is bound to follow—whatever the right hon. Gentleman may hope for in the case of freight charges for the time being, an increase in bus fares is certain to follow—are all increasing the cost of living, and are bound to give a further fillip to the whole inflationary spiral.

    Here let me interpose this. I do not think that the right hon. Gentleman's answer on agriculture really met our point. The point surely is this, that by taking into account the increase in the Petrol Duty in the review of farm prices the right hon. Gentleman is putting the increase in petrol directly on the food prices. That is, in fact, what he is doing. Whereas, of course, if he had offered the farmers some concession as is suggested in the Amendment, they would not have made such a large increase in food prices.

    I referred just now to the problem of fares, and many of my hon. and right hon. Friends, too, have spoken on that matter. I should like to ask the Chancellor, if he can, even at this hour, to say something in reply to a question I want to put to him about something that appeared in the Press recently—in the "News Chronicle" on 29th April. There was a story on the front page that the Government intend not only to impose this increase in the Petrol Duty but also to oblige the road haulage business to pay a further charge or levy.

    Now, this is really a matter of considerable importance to those engaged in the business, and it really is going a bit far, if there is to be another levy on top of the Petrol Tax—the increase in which has been defended by some hon. Members opposite, rather curiously, with exactly the opposite arguments to those they used over here, as being something which has helped to get the balance right between road and rail. What I want to know is whether there is anything in this story relating to the Government's transport policy that there is to be a further levy on road haulage. Would the Chancellor like to say anything on that, because I know, in fact, there is great anxiety about it? Indeed, it is of interest to those concerned and to the consuming public as a whole that their minds should be put to rest at the earliest possible moment. Would he care to deny the story?

    I have nothing to say, except that the Committee—and the House at a later date—must await the publication of the Government's policy.

    So it means really that on top of the Petrol Duty there is to be a further levy on road haulage and that the consuming public must pay something more in addition?

    I have told the right hon. Gentleman and the Committee that the Committee—and the House at a later date—must await the publication of the Government's policy and get the facts. I can make no further observation now.

    All I can say is that that answer is very, very far from reassuring anybody.

    I turn to two arguments which the Government have put in defence of this tax. First, the argument based on Abadan. I am bound to say that I thought that the right hon. Gentleman was defending his Budget and this particular tax on rather different lines from those with which he defended it in the Budget itself, because what he said—and it was before the words quoted by the hon. Member for Basingstoke (Mr. Donner)—was this:
    "I now come to some major proposals. While budgeting for a large surplus I yet wish to finance certain important changes which the Government conceive to be in the interest"—
    and so on. In other words, it is quite obvious that what he had in mind in his Petrol Duty in the Budget was revision in the Income Tax, and so on. At a later stage it is only after that that he then says:
    "I have only one tax increase to propose and that is on oil."—[OFFICIAL REPORT, 11th March, 1952; Vol. 497, c. 1296.]
    And then speaks about the balance of payments difficulties, but as far as he was concerned the principle reason was not the loss of Abadan. It was, of course, part of his general Budget design, and we are not concerned to discuss that in any detail. Indeed, we could not this evening, but it is obvious that that was the main reason for it and not the loss of Abadan at all.

    If it were the case that the right hon. Gentleman brought this tax in simply to reduce consumption, then the revenue he is obtaining on it is a kind of accidental by-product. If that is the case, there is even less justification for the cuts in food subsidies and other social services that were made.

    We are not yet clear whether the Chancellor expects that consumption will be reduced. Many hon. Members on both sides of the Committee take the view that it would not, in fact, reduce consumption except to a tiny extent, and even the argument about the dollar content was not to my mind entirely convincing. For some time there has been a dollar content in our oil here, and there has been a substantial dollar content in what one might call the marginal oil—the last 100 tons of oil which we have to buy. I think I am right in saying that that was the case before the loss of Abadan.

    As I say, one really gets no clear idea as to how much is saved and as to what this means in terms of dollars. None of us would for one moment question the importance of saving dollars, and in the absence of that and in the light of what the right hon. Gentleman has said, I think the talk about Abadan is a kind of a lifebelt which the right hon. Gentleman and hon. Gentlemen opposite clutch at in order to save themselves from their appalling contradictions.

    The other argument is about the Budget generally. The right hon. Gentleman cannot claim that this year it was necessary to impose this duty in order to raise revenue for defence purposes. In fact, the Budget gave away some £24 million, and there was no increase in the total revenue at all except what came in automatically from the existing taxes.

    Our view on this has been very well stated by my right hon. Friend the Member for Battersea, North (Mr. Jay). We say that if, in fact, the Chancellor wanted this in order to make certain other concessions, in the first place he certainly cannot argue that this was done in order to increase the social service benefits, because when I proposed during the Budget debate that that might be done and these two things matched together—the increase in the Petrol Duty and the social services—I was told at once that no such thing could be done and that it was quite unfair. So that one goes. It is part and parcel of this general scheme of increases in indirect taxation and increases in food prices in order to finance reductions in Income Tax.

    We said—and I repeat what my right hon. Friend said—that we do not believe that the £70 million a year—and the Chancellor certainly has not denied that it will amount to this figure—that will have to be paid on the National Debt as a

    Division No. 107.]


    [7.53 p.m.

    Aitken, W. T.Butcher, H. W.Fletcher-Cooke, C.
    Allan, R. A. (Paddington, S.)Butler, Rt. Hon. R. A. (Saffron Walden)Fort, R.
    Alport, C. J. M.Carr, Robert (Mitcham)Foster, John
    Amery, Julian (Preston, N.)Carson, Hon. E.Fraser, Sir Ian (Morecambe & Lansdale)
    Amory, Heathcoat (Tiverton)Cary, Sir RobertFyfe, Rt. Hon. Sir David Maxwell
    Ansthruther-Gray, Major W. J.Channon, H.Gage, C. H.
    Arbuthnot, JohnClarke, Col. Ralph (East Grinstead)Galbraith, Cmdr. T. D. (Pollok)
    Ashton, H. (Chelmsford)Clarke, Brig. Terence (Portsmouth, W.)Gammans, L. D.
    Assheton, Rt. Hon. R. (Blackburn, W.)Clyde, Rt. Hon. J. L.Garner-Evans, E. H.
    Astor, Hon. J. J. (Plymouth, Sutton)Cole, NormanGodber, J. B.
    Astor, Hon. W. W. (Bucks, Wycombe)Colegate, W. A.Gomme-Duncan, Col. A.
    Baker, P. A. D.Conant, Maj. R. J. E.Gough, C. F. H.
    Baldock, Lt.-Cmdr. J. M.Cooper, Sqn. Ldr. AlbertGower, H. R.
    Baldwin, A. E.Cooper-Key, E. M.Graham, Sir Fergus
    Banks, Col. C.Craddock, Beresford (Spelthorne)Gridley, Sir Arnold
    Barber, A. P. L.Cranborne, ViscountGrimston, Hon. John (St. Albans)
    Barlow, Sir JohnCrookshank, Capt. Rt. Hon. H. F. C.Grimston, Sir Robert (Westbury)
    Baxter, A. B.Crosthwaite-Eyre, Col. O. E.Harden, J. R. E.
    Beach, Maj. HicksCrouch, R. F.Hare, Hon. J. H.
    Bell, Philip (Bolton, E.)Crowder, John E. (Finchley)Harris, Frederic (Croydon, N.)
    Bell, Ronald (Bucks, S.)Crowder, Petre (Ruislip—Northwood)Harris, Reader (Heston)
    Bennett, F. M. (Reading, N.)Darling, Sir William (Edinburgh, S.)Harrison, Col. J. H. (Eye)
    Bennett, Dr. Reginald (Gosport)Davidson, ViscountessHarvey, Air Cdre. A. V. (Macclesfield)
    Bennett, William (Woodside)Deedes, W. F.Harvey, Ian (Harrow, E.)
    Bevins, J. R. (Toxteth)Digby, S. WingfieldHarvie-Watt, Sir George
    Birch, NigelDodds-Parker, A. D.Hay, John
    Bishop, F. P.Donaldson, Cmdr. C. E. McA.Head, Rt. Hon. A. H.
    Black, C. W.Donner, P. W.Heald, Sir Lionel
    Boothby, R. J. G.Doughty, C. J. A.Heath, Edward
    Bossom, A. C.Douglas-Hamilton, Lord MalcolmHiggs, J. M. C.
    Boyd-Carpenter, J. A.Drayson, G. B.Hill, Dr. Charles (Luton)
    Boyle, Sir EdwardDugdale, Maj. Rt. Hn. Sir T. (Richmond)Hill, Mrs. E. (Wythenshawe)
    Braine, B. R.Duncan, Capt. J. A. L.Hirst, Geoffrey
    Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)Duthie, W. S.Holland-Martin, C. J.
    Brooke, Henry (Hampstead)Eden, Rt. Hon. A.Hollis, M. C.
    Brooman-White, R. C.Elliot, Rt. Hon. W. E.Holmes, Sir Stanley (Harwich)
    Browne, Jack (Govan)Erroll, F. J.Hopkinson, Henry
    Buchan-Hepburn, Rt. Hon. P. G. T.Fell, A.Hornsby-Smith, Miss M. P.
    Bullard, D. G.Finley, GraemeHorobin, I. M.
    Bullock, Capt. M.Fisher, NigelHorsbrugh, Rt. Hon. Florence
    Bullus, Wing Commander E. E.Fleetwood-Hesketh, R. F.Howard, Gerald (Cambridgeshire)
    Burden, F. F. A.Fletcher, Walter (Bury)Howard, Greville (St. Ives)

    result of the rise in interest rates—[ Laughter.] Somebody is laughing, but I do not think it is a laughing matter at all. What we say is that it was not necessary to impose the burden on the Exchequer in order to get the financial consequences which the Chancellor was aiming at.

    A further point is that when we analyse these Income Tax concessions we find—and this figure comes from the Chancellor himself—that £50 million of them goes to those with £1,000 a year or more, and we say that this concession to people who are already pretty well off at the expense of the users of transport is quite unjustified. The ill effects of this tax are not in dispute. We are not convinced by the case made out for it, and we shall, therefore, have great pleasure in going into the Division Lobby in support of our Amendment.

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

    The Committee divided: Ayes, 283; Noes, 268.

    Hudson, Sir Austin (Lewisham, N.)Mellor, Sir JohnSmithers, Peter (Winchester)
    Hudson, W. R. A. (Hull, N.)Molson, A. H. E.Smithers, Sir Waldron (Orpington)
    Hurd, A. R.Moore, Lt.-Col, Sir ThomasSmyth, Brig. J. G. (Norwood)
    Hutchison, Lt.-Com. Clark (E'b'rgh W.)Morrison, John (Salisbury)Snadden, W. McN.
    Hyde, Lt.-Col. H. M.Mott-Radclyffe, C. E.Soames, Capt. C.
    Hylton-Foster, H. B. H.Nabarro, G. D. N.Spearman, A. C. M.
    Jenkins, R. C. D. (Dulwich)Nicholls, HarmarSpeir, R. M.
    Jennings, R.Nicholson, Godfrey (Farnham)Spence, H. R. (Aberdeenshire, W.)
    Johnson, Eric (Blackley)Nicolson, Nigel (Bournemouth, E.)Spens, Sir Patrick (Kensington, S.)
    Jones, A. (Hall Green)Nield, Basil (Chester)Stanley, Capt. Hon. Richard
    Joynson-Hicks, Hon. L. W.Noble, Cmdr. A. H. P.Stevens, G. P.
    Kaberry, D.Nugent, G. R. H.Steward, W. A. (Woolwich, W.)
    Keeling, Sir EdwardOdey, G. W.Stewart, Henderson (Fife, E.)
    Kerr, H. W. (Cambridge)O'Neill, Rt. Hon. Sir H. (Antrim, N.)Stoddart-Scott, Col. M.
    Lambert, Hon. C.Orr, Capt. L. P. S.Storey, S.
    Lambton, ViscountOrr-Ewing, Charles Ian (Hendon, N.)Strauss, Henry (Norwich, S.)
    Lancaster, Col. C. G.Orr-Ewing, Ian L. (Weston-super-Mare)Stuart, Rt. Hon. James (Moray)
    Law, Rt. Hon. R. K.Osborne, C.Studholme, H. G.
    Leather, E. H. C.Partridge, E.Summers, G. S.
    Legge-Bourke, Maj. E. A. H.Peaks, Rt. Hon. O.Sutcliffe, H.
    Legh, P. R. (Petersfield)Perkins, W. R. D.Taylor, William (Bradford, N.)
    Lennox-Boyd, Rt. Hon. A. T.Peto, Brig. C. H. M.Teeling, W.
    Lindsay, MartinPeyton, J. W. W.Thomas, Rt. Hon. J. P. L. (Hereford)
    Linstead, H. N.Pickthorn, K. W. M.Thomas, P. J. M. (Conway)
    Lloyd, Rt. Hon. G. (King's Norton)Pilkington, Capt. R. A.Thompson, Kenneth (Walton)
    Lloyd, Maj. Guy (Renfrew, E.)Pitman, I. J.Thompson, Lt.-Cdr. R. (Croydon, W.)
    Lloyd, Rt. Hon. Selwyn (Wirral)Powell, J. EnochThorneycroft, R. Hn. Peter (Monmouth)
    Lockwood, Lt.-Col. J. C.Price, Henry (Lewisham, W.)Thornton-Kemsley, Col. C. N.
    Longden, Gilbert (Herts, S.W.)Prior-Palmer, Brig. O. L.Tilney, John
    Low, A. R. W.Profumo, J. D.Turner, H. F. L.
    Lucas, Sir Jocelyn (Portsmouth, S.)Raikes, H. V.Turton, R. H.
    Lucas, P. B. (Brantford)Rayner, Brig. R.Vane, W. M. F.
    Lucas-Tooth, Eir HughRedmayne, E.Vaughan-Morgan, J. K.
    McAdden, S. J.Remnant, Hon. P.Vosper, D. F.
    McCorquodale, Rt. Hon. M. S.Renton, D. L. M.Wakefield, Edward (Derbyshire, W.)
    Macdonald, Sir Peter (I. of Wight)Roberts, Peter (Heeley)Wakefield, Sir Wavell (Marylebone)
    Mackeson, Brig. H. R.Robertson, Sir DavidWalker-Smith, D. C.
    McKibbin, A. J.Robinson, Roland (Blackpool, S.)Ward, Hon. George (Worcester)
    McKie, J. H. (Galloway)Robson-Brown, W.Ward, Miss I. (Tynemouth)
    MacLeod, Iain (Enfield, W.)Rodgers, John (Sevenoaks)Waterhouse, Capt. Rt. Hon. C.
    Macmillan, Rt. Hon. Harold (Bromley)Roper, Sir HaroldWatkinson, H. A.
    Macpherson, Maj. Niall (Dumfries)Ropner, Col. Sir LeonardWebbe, Sir H. (London & Westminster)
    Maitland, Comdr. J. F. W. (Horncastle)Russell, R. S.Wellwood, W.
    Maitland, Patrick (Lanark)Ryder, Capt. R. E. D.White, Baker (Canterbury)
    Manningham-Buller, Sir R. E.Salter, Rt. Hon. Sir AthurWilliams, Rt. Hon. Charles (Torquay)
    Markham, Major S. F.Sandys, Rt. Hon. D.Williams, Gerald (Tonbridge)
    Marlowe, A. A. H.Savory, Prof. Sir DouglasWilliams, Sir Herbert (Croydon, E.)
    Marshall, Douglas (Bodmin)Schofield, Lt.-Col. W. (Rochdale)Wills, G.
    Marshall, Sidney (Sutton)Scott, R. DonaldWilson, Geoffrey (Truro)
    Maude, AngusScott-Miller, Cmdr. R.Wood, Hon. R.
    Maudling, R.Shepherd, WilliamYork, C.
    Maydon, Lt.-Comdr. S. L. C.Simon, J. E. S. (Middlesbrough, W.)
    Medlicott, Brig. F.Smiles, Lt.-Col. Sir WalterTELLERS FOR THE AYES:
    Mr. Drewe and Mr. Oakshott


    Acland, Sir RichardBrown, Rt. Hon. George (Belper)Deer, G.
    Adams, RichardBrown, Thomas (Ince)Delargy, H. J.
    Albu, A. H.Burke, W. A.Dodds, N. N.
    Anderson, Frank (Whitehaven)Burton, Miss F. E.Donnelly, D. L.
    Attlee, Rt. Hon. C. R.Butler, Herbert (Hackney, S.)Driberg, T. E. N.
    Awbery, S. S.Callaghan, L. J.Dugdale, Rt. Hon. John (W. Bromwich)
    Ayles, W. H.Carmichael, J.Ede, Rt. Hon. J. C.
    Bacon, Miss AliceCastle, Mrs. B. A.Edelman, M.
    Baird, J.Champion, A. J.Edwards, John (Brighouse)
    Balfour, A.Chapman, W. D.Edwards, Rt. Hon. Ness (Caerphilly)
    Barnes, Rt. Hon. A J.Chetwynd, G. R.Edwards, W. J. (Stepney)
    Bartley, P.Clunie, J.Evans, Albert (Islington, S.W.)
    Bellenger, Rt. Hon. F. J.Cocks, F. S.Evans, Edward (Lowestoft)
    Bence, C. R.Coldrick, W.Evans, Stanley (Wednesbury)
    Benn, WedgwoodCollick, P. H.Ewart, R.
    Benson, G.Cook, T. F.Fernyhough, E.
    Beswick, F.Corbet, Mrs. FredaField, W. J.
    Bevan, Rt. Hon. A. (Ebbw Vale)Cove, W. G.Fienburgh, W.
    Bing, G. H. C.Craddock, George (Bradford, S.)Finch, H. J.
    Blackburn, F.Crosland, C. A. R.Fletcher, Eric (Islington, E.)
    Blyton, W. R.Crossman, R. H. S.Follick, M.
    Boardman, H.Cullen, Mrs. A.Foot, M. M.
    Bottomley, Rt. Hon. A G.Daines, P.Forman, J. C.
    Bowden, H. W.Dalton, Rt. Hon. H.Fraser, Thomas (Hamilton)
    Bowen, E. R.Darling, George (Hillsborough)Freeman, John (Watford)
    Braddock, Mrs. ElizabethDavies, A. Edward (Stoke, N.)Freeman, Peter (Newport)
    Brockway, A. F.Davies, Ernest (Enfield, E.)Gaitskell, Rt. Hon. H. T. N.
    Brook, Dryden (Halifax)Davies, Harold (Leek)Gibson, C. W.
    Broughton, Dr. A. D. D.Davies, Stephen (Merthyr)Glanville, James

    Gooch, E. G.McGhee, H. G.Shawcross, Rt. Hon. Sir Hartley
    Gordon-Walker, Rt. Hon. P. C.McInnes, J.Shinwell, Rt. Hon. E.
    Greenwood, Anthony (Rossendale)McKay, John (Wallsend)Short, E. W.
    Greenwood, Rt. Hon. Arthur (Wakefield)McLeavy, F.Shurmer, P. L. E.
    Grenfell, Rt. Hon. D. R.McNeil, Rt. Hon. H.Silverman, Julius (Erdington)
    Grey, C. F.MacPherson, Malcom (Stirling)Simmons, C. J. (Brierley Hill)
    Griffiths, David (Rother Valley)Mainwaring, W. H.Slater, J.
    Griffiths, Rt. Hon. James (Llanelly)Mallalieu, E. L. (Brigg)Smith, Norman (Nottingham, S.)
    Grimond, J.Mallalieu, J. P. W. (Huddersfield, E.)Sorensen, R. W.
    Hale, Leslie (Oldham, W.)Manuel, A. C.Soskice, Rt. Hon. Sir Frank
    Hall, Rt. Hon. Glenvil (Colne Valley)Marquand, Rt. Hon. H. A.Sparks, J. A.
    Hall, John (Gateshead, W.)Mayhew, C. P.Steele, T.
    Hamilton, W. W.Mellish, R. J.Stokes, Rt. Hon. R. R.
    Hardy, E. A.Messer, F.Strachey, Rt. Hon. J.
    Hargreaves, A.Mikardo, IanStrauss, Rt. Hon. George (Vauxhall)
    Harrison, J. (Nottingham, E.)Mitchison, G. R.Summerskill, Rt. Hon. E.
    Hastings, S.Monslow, W.Swingler, S. T.
    Hayman, F. H.Moody, A. S.Sylvester, G. O.
    Healey, Denis (Leeds, S.E.)Morgan, Dr. H. B. W.Taylor, Bernard (Mansfield)
    Henderson, Rt. Hon. A (Rowley Regis)Morley, R.Taylor, John (West Lothian)
    Herbison, Miss M.Morris, Percy (Swansea, W.)Taylor, Rt. Hon. Robert (Morpeth)
    Hewitson, Capt. M.Morrison, Rt. Hon. H. (Lewisham, S.)Thomas, David (Aberdare)
    Hobson, C. R.Moyle, A.Thomas, George (Cardiff)
    Holman, P.Mulley, F. W.Thomas, Iorwerth (Rhondda, W.)
    Holmes, Horace (Hemsworth)Murray, J. D.Thomas, Ivor Owen (Wrekin)
    Holt, A. F.Neal, Harold (Bolsover)Thorneycroft, Harry (Clayton)
    Houghton, DouglasNoel-Baker, Rt. Hon. P. J.Thurtle, Ernest
    Hoy, J. H.O'Brien, T.Tomney, F.
    Hubbard, T. F.Oldfield, W. H.Turner-Samuels, M.
    Hudson, James (Ealing, N.)Oliver, G. H.Ungoed-Thomas, Sir Lynn
    Hughes, Cledwyn (Anglesey)Orbach, M.Usborne, H. C.
    Hughes, Emrys (S. Ayrshire)Oswald, T.Viant, S. P.
    Hynd, H. (Accrington)Padley, W. E.Wade, D. W.
    Hynd, J. B. (Attercliffe)Paling, Rt. Hon. W. (Dearne Valley)Wallace, H. W.
    Irvine, A. J. (Edge Hill)Paling, Will T. (Dewsbury)Watkins, T. E.
    Irving, W. J. (Wood Green)Pannell, CharlesWebb, Rt. Hon. M. (Bradford, C.)
    Isaacs, Rt. Hon. G. A.Pargiter, G. A.Weitzman, D.
    Janner, B.Parker, J.Wells, Percy (Faversham)
    Jay, Rt. Hon. D. P. T.Paton, J.Wells, William (Walsall)
    Jeger, George (Goole)Pearson, A.West, D. G.
    Jeger, Dr. Santo (St. Pancras, S.)Peart, T. F.Wheatley, Rt. Hon. John
    Jenkins, R. H. (Stechford)Plummer, Sir LeslieWhite, Mrs. Eirene (E. Flint)
    Johnson, James (Rugby)Porter, G.White, Henry (Derbyshire, N.E.)
    Johnston, Douglas (Paisley)Price, Joseph T. (Westhoughton)Whiteley, Rt. Hon. W.
    Jones, David (Hartlepool)Price, Philips (Gloucestershire, W.)Wigg, George
    Jones, Frederick Elwyn (West Ham, S.)Proctor, W. T.Wilcock, Group Capt. C. A. B.
    Jones, Jack (Rotherham)Pryde, D. J.Wilkins, W. A.
    Jones, T. W. (Merioneth)Pursey, Cmdr. H.Willey, Frederick (Sunderland, N.)
    Keenan, W.Reeves, J.Willey, Octavius (Cleveland)
    Kenyon, C.Reid, Thomas (Swindon)Williams, David (Neath)
    Key, Rt. Hon. C. W.Reid, William (Camlachie)Williams, Rev. Llywelyn (Abertillery)
    King, Dr. H. M.Rhodes, H.Williams, Ronald (Wigan)
    Kinley, J.Richards, R.Williams, W. R. (Droylsden)
    Lee, Frederick (Newton)Robens, Rt. Hon. A.Williams, W. T. (Hammersmith, S.)
    Lee, Miss Jennie (Cannock)Roberts, Albert (Normanton)Winterbottom, Ian (Nottingham, C.)
    Lever, Harold (Cheetham)Roberts, Goronwy (Caernarvonshire)Winterbottom, Richard (Brightside)
    Lever, Leslie (Ardwick)Rogers, George (Kensington, N.)Woodburn, Rt. Hon. A.
    Lewis, ArthurRoss, WilliamYates, V. F.
    Lindgren, G. S.Royle, C.Younger, Rt. Hon. K.
    Logan, D. G.Schofield, S. (Barnsley)
    MacColl, J. E.Shackleton, E. A. A.TELLERS FOR THE NOES:
    Mr. Hannan and Mr. Arthur Allen.

    I beg to move, in page 2, line 6, at the end, to insert:

    "except that in the case of hydrocarbon oils used for the propulsion of invalid chairs driven by disabled persons the rate of duty shall be one shilling and tenpence halfpenny a gallon."
    I understand that with this Amendment three other Amendments which cover motor vehicles provided by the Ministry of Pensions are being considered. It relates to the invalid chairs which are known as motor-propelled tricycles, and which are used by the severely disabled, and it proposes that they should be exempted from this increase in the Petrol Duty.

    This is a non-controversial issue. The problems of the disabled, and especially of the war disabled, have always been regarded as above party political strife. Therefore, the gusty arguments of the Kidderminster kidder or the Abadan alibi of the other side of the Committee, do not enter into this issue at all. We feel that the Chancellor, unlike his diehard colleague the Minister of Health, is not desirous of taxing cripples, and so I make my plea to him with a certain amount of confidence.

    The increase in the Petrol Duty is admitted on all sides to be likely to cause inconvenience. To some people it will mean a sacrifice, but to the crippled and disabled ex-Service man, whose motor-propelled tricycle is the only form of locomotion, it will mean more than inconvenience or sacrifice. It will be a cruel hardship. These vehicles enable cripples to get to and from work when otherwise they would have to suffer enforced idleness. I have seen in the Press today a report of the Remploy factories, giving an indication of the amount of public money which is spent on training and rehabilitating cripples to enable them to become effective units in the industrial machine. If they get their training at those factories, and then are unable to use their motor-propelled tricycles, they are still a dead loss to the community.

    The motor-propelled tricycles are of the greatest advantage to those of our disabled who, for many years, have been bedridden or housebound. Hon. Members who have not had the experience of visiting these people cannot comprehend the dread monotony, the drab existence, that they have had to undergo. The coming of the motor-propelled tricycle and of the cars that are given by the Ministry of Pensions, opened out new vistas of life to them. They are beginning to live for the first time since their disability began.

    For these people at least it has provided an opportunity to see the world around them and get some enjoyment out of an otherwise drab existence. Many of them are unable to work and have to live on their National Insurance benefits plus any National Assistance to which they may be entitled. This tax increase is the third in a very short time. It is likely to bear heavily upon them.

    War pensioners are dealt with in one of the other Amendments. I am dealing with the motor-propelled tricycle at the moment, the users of which are in a specially disadvantageous position. It is not the 100 per cent. disabled man who is using the motor-propelled tricycle. If a man is badly disabled by multiple injuries or double amputation he will be using a car and, because of his 100 per cent. disability, is entitled to higher supplementation. The 75 to 90 per cent. disability man can only qualify for 35s. a week unemployability supplement in lieu of his earnings, and therefore this impost will be very heavy upon him.

    It is not an exaggeration to say that for these men and women the Petrol Tax is equivalent to a tax on walking, because a motor-propelled vehicle is a substitute for the use of or the actual limbs they have lost. The remission of this tax would cost the Exchequer very little. In July, 1951, there were in use 6,170 motor-propelled tricycles supplied through the Ministry of Pensions, 1,470 of which went to war pensioners and 4,700 of which were being used by National Health patients.

    These vehicles do about 70 miles to the gallon, and assuming the users travel on an average 140 miles a week, that means they use two gallons of petrol a week. I am not a financial expert. I left school when I was 14 years of age and I have never had much need to go in for mathematics, and no money to do it with. In my humble calculation, however, and subject to correction, it would cost the Exchequer well under £20,000. That is a very small price to pay for giving such an amount of happiness.

    Successive Ministers of Pensions have found implacable Treasury officials trying to dam the flow of the milk of human kindness which flows naturally from the Ministry of Pensions. I am sure that the Minister himself will be grateful to us for raising this matter tonight because it will help him as much as it will help us, and I am sure that all who are interested in the welfare of ex-Service people will feel the same.

    The Chancellor may have made up his mind once about this, but it should not be impossible for us to convince him that he might be bold enough to change his mind on this human problem. He might emulate the Minister of Pensions who, on 18th March, said:
    "I am not convinced that in the present circumstances an increase in the allowance is warranted nor would I be justified in initiating an allowance for war pensioners using motor chairs, which are maintained by the Ministry."—[OFFICIAL REPORT, 18th March, 1952; Vol. 497, c. 196.]
    8.15 p.m.

    The car allowance which was initiated by a Labour Minister of Pensions early in 1945 at £45 has been twice increased: in April, 1950, to £50 and in April, 1951, to £52 10s. Less than a month after the statement I have quoted the Minister of Pensions was able to come to the House of Commons and emulate his Labour predecessor in office in synchronising with the increase in the Petrol Duty a further increase in the car allowance of £4 10s. to £57.

    As I read the Regulations this is not strictly a petrol allowance at all but an allowance for maintenance and repairs. So we are coupling with our demand in respect of tricycles tonight a request that owners of cars supplied by the Ministry of Pensions should have the same concessions as those which go to users of motor-propelled tricycles. Because what was not warranted in March was done in April, and because there is such a strong humanitarian appeal, I suggest that for a mere £20,000 the disabled drivers of motor-propelled tricycles and cars might be granted this concession. I think it will represent about £3 per head per annum.

    In the debate just concluded one of my hon. Friends spoke of the reduction in the car tax on the big cars owned by rich people by £10 10s. a year. When we give that amount to some opulent or corpulent company director, can we refuse about £3 or £5 a year to those who have suffered in this way? There could be no evasion or sharp practice. These vehicles are capable of carrying only one passenger. They are distinctive. They cannot be used by anyone but a disabled person.

    From personal experience in the Ministry of Pensions of this class of user, I feel that the latest impost is the last straw that will break the camel's back as far as these people are concerned. In saying that, I am risking the ridicule of the Chancellor because he has already ridiculed this argument. I therefore most earnestly appeal to the Financial Secretary to the Treasury, in the absence of the Chancellor, to accept the Amendment.

    So strong is this case that, if we could have a free vote in the Committee on it we should carry the Amendment, so overwhelming would be the opinion of hon. Members. If the Chancellor finds that there are administrative difficulties about adjusting the tax, he can adopt the simple expedient of going to the Minister of Pensions and saying, "These people deserve some concession. I give you authority to put in your Estimates this year sufficient to make them a grant of £3 or £5 a year to compensate them for this increase."

    Before the hon. Gentleman sits down may I ask him a question? He was rather evasive about his arithmetic, but I understood him to say that £57 is the maintenance allowance for a car and that it travels roughly 150 miles a week. [An HON. MEMBER: "One hundred and forty."] The hon. Gentleman said it would use about two gallons a week, which comes to £25 a year approximately.

    The hon. and gallant Member is a little confused. He is dealing with cars. I was dealing, in connection with those figures, with a motor-propelled tricycle which does 70 miles to the gallon, and I was basing my calculations on that.

    I should like for a brief moment to support the case which has been so convincingly put by the hon. Member for Brierley Hill (Mr. Simmons), who, as we all know, has such wide experience in these matters. His plea is for a tax relief in respect of invalid chairs for disabled persons, an appeal with which, I imagine, every hon. Member will be in full agreement.

    There seem to be two substantial grounds upon which we could ask for favourable consideration of this question. The first is that the proposal seeks to help a section of the community which every hon. Member would seek to help. The second is that the loss of revenue involved, as the hon. Member pointed out, is extremely unsubstantial. The public, therefore, would lose but little; the individual would profit considerably if the concession was made.

    We all rejoiced when the Ministry of Pensions found it possible to provide these chairs and vehicles, which have made so great a difference to these unfortunate people. Much of the value of that may be lost if there is a danger of their being unable adequately to operate or maintain the vehicles. In these circumstances, I most sincerely trust that some concession, at any rate, will be forthcoming.

    I am very glad that the hon. and learned Member for the City of Chester (Mr. Nield) has intervened. He has confirmed the view we all hold that the Financial Secretary to the Treasury must give an extremely good answer if he is to avoid the displeasure of the Committee. Indeed, some of his hon. Friends would find it quite impossible, if we took this matter to a Division, to vote against what we are asking for. The Committee will agree that my hon. Friend the Member for Brierley Hill (Mr. Simmons), who moved the Amendment, is well qualified to ask for some concession to disabled people. He is himself disabled and has the respect of all Members.

    The point which needs to be stressed regarding the tricycles is that they have given so much happiness to people who for most of their life have not had happiness. By citing one individual case, I can illustrate the position of many of these people. The case is that of a man who as a child was severely injured in a road accident, and never did a day's work until 1942, because he was just not wanted. No one would, or could, employ him. He had his first job in 1942. Thanks to the Ministry of Labour with their Remploy factories and to the Ministry of Pensions with their tricycles, that man is today employed as regularly as anyone else. He is able to do a fine job of work, and is a credit to all who know him. He now has happiness where previously there was nothing in his life but misery. To that kind of person the additional tax represents something of a burden.

    It is useless for the Financial Secretary to profess the best will in the world and all the love and affection, and so on, but to say that the administrative difficulties are so great that our proposal cannot be accepted. No doubt he will tell us the story of people going about with special petrol chits and of the black market in these things. There is, however, a very simple alternative, as my hon. Friend suggested.

    A yearly grant could be made through the Ministry of Pensions to help to compensate the disabled for the increase in the tax. It would be an indication that we recognise these people to be in a special category. For one thing, as the Minister of Pensions will agree, most of those who are war pensioners do not get the 100 per cent. pension. They do not, therefore, get the full value, but only a percentage, of the recent increase which has been awarded. On that basis alone, there is a special case for helping these people.

    I sincerely hope that we shall not hear the story about administrative difficulties; if such things exist they can be overcome. If we can make a yearly grant and allow the Ministry of Pensions to adjust their estimates, we shall earn the regard of the whole House of Commons.

    I feel sure that the whole Committee, and certainly the ex-Service men concerned, will be grateful to the hon. Member for Brierley Hill (Mr. Simmons) and to his hon. Friends for putting down the Amendment.

    It was in the time of the first Government after the war—the Labour Government—that the motor cars were provided, and there went with them a substantial allowance of, I think, £50 a year—

    —to go some way towards meeting the expense of running the vehicles. In each Budget since then, hon. Members on all sides have joined together to ask the Chancellor of the day to see that the additional burden of petrol tax which fell upon the users of these motor cars was not fully met by this class of user.

    The usual formula appears to be that the Minister of Pensions refuses the suggestion when it is put in the form of a Parliamentary Question, that a little later the Chancellor says that he cannot adopt the proposal in that way but will ask the Minister to do it in another way, and that a few weeks later it is done. That practice having been so well established, it did not surprise me when my hon. Friend the Minister of Pensions was able to say only the other day that it was his Ministry's intention to adopt that proposal so far as the motor cars were concerned.

    The special plea that we make tonight is that that kind of consideration be now applied to the tricycles. This has been asked for over the past three or four years, and no one was more eloquent in his pleading for it than my hon. Friend the Member for Bridlington (Mr. Wood).

    There is no one whose heart is not touched by the sight of the cheerful disabled soldier in his little three-wheeled chair, going to his job or to a football match. If we give him this artificial means of locomotion, then with the rising costs all round we ought to do what we can to make it possible for him to afford it.

    Many of these men cannot afford five, six or seven shillings a week. That is why pleas have been made so frequently for raising the amount of the war pension. Certainly the little man in his little chair cannot afford the extra cost which the tax involves, and I hope, therefore, that this time, even if they cannot accept the Amendment, the Government will authorise the Ministry of Pensions to initiate an allowance for these men with their tricycles.

    The cost of the proposal, it has been said, would be very small, and the amount of happiness that would be given would be very great. I do not take the rather despondent view of the hon. Member for Bermondsey (Mr. Mellish), who expects my hon. Friend the Financial Secretary to say that he cannot adopt the proposal for this, that and the other reason. I have every reason to hope that this time my hon. Friend will get up and say that he will accept it. If so, I for my part will be prepared to thank hon. Gentlemen opposite for having raised the matter, but especially—and I am sure the whole Committee agrees with me—will I thank my hon. Friend the Member for Bridlington, who in particular raised this matter year after year during the past three or four years.

    8.30 p.m.

    I am very glad to support the eloquent appeal made by my hon. Friend the Member for Brierley Hill (Mr. Simmons) that some relief and assistance might be given to the users of invalid chairs.

    I think that two of the best things the Labour Government of 1945–50 did were first, to institute the Remploy factories and second, to provide disabled men and women with these chairs. Through Remploy factories many men and women have learned a simple trade, which has enabled them to earn their living, whereas otherwise they would be dependent almost all their lives on National Assistance.

    The motor-driven chairs which have been supplied have enabled these men and women not only to go to and from their work, which otherwise they would never have been able to do because, on account of their disabilities, very few are able to use buses or trams or ordinary means of locomotion, but also to have some small degree, at least, of social intercourse by going to see their friends and to meetings and taking part in social activities.

    I have the honour to be a vice-president, with my hon. Friend the Member for the Southampton, Test (Dr. King) of the Invalid Chairs Association of Southampton and have had the opportunity of meeting these men and women. I admire the very courageous way in which they bear their disabilities and the brave way in which they try to make the most out of their lives in spite of those very serious disabilities. I am sure that these invalid chairs have been of very great help to them.

    The increase in the petrol tax means that, on an average, their invalid chairs will cost them at least from 1s. to 2s. a week more to run. In answer to a Question the other day, the Parliamentary Secretary to the Ministry of Pensions said that the additional cost would be from one-ninth of a penny a mile to one-sixth of a penny per mile. For most of them that means an additional cost in petrol and oil of from 1s. to 2s. a week. In addition, these people suffer from the general increase in prices which both sides of the Committee admit is bound to result from the increase in the petrol tax.

    I listened to the debate on the 4½d. increase in the petrol tax last year and heard hon. Member after hon. Member on the Conservative side say that this was the most inflationary form of tax which could be conceived and that it would be bound to mean a rise in the general level of the cost of living. I am afraid it will happen again this time and, of course, it will hit these unfortunate people.

    They will be doubly hit, first, by the increase in the petrol tax and second by the increased cost of living. Most of them are earning very low wages. £4 10s. to £5 a week, and even those who have other sources of income are on a very low level. Hon. Members on all sides of the Committee must have sympathy with the desire of my hon. Friend the Member for Brierley Hill, and if this matter were put to a free vote not one hon Member would vote against it.

    It may be said by the Financial Secretary that there are administrative difficulties in the way of accepting the Amendment. That may be so, but if so, I hope he will be able to say that if he cannot help these people in this manner he will help them through the agency of his hon. Friend by giving an annual grant to compensate them. I am sure that if he does that he will earn their gratitude and the thanks of hon. Members on all sides of the House.

    It may be convenient if at this stage I try to indicate the attitude of the Government towards the two Amendments which, I understand, under the Ruling of your predecessor in the Chair, Wing Commander Hulbert, we are now discussing. I agree with my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) that it was very appropriate that these Amendments should have been put forward by the hon. Member for Brierley Hill (Mr. Simmons), whose familiarity with the subject at the Ministry of Pensions we all recognise. Indeed, I have good reason to know the interest he took in the subject of the provision, for disabled Service pensioners, of motor cars and of tricycles, since I corresponded with him more than once on the subject and received replies which, while always sympathetic, were sometimes satisfactory.

    The two Amendments are in the form of relieving petrol used in these vehicles from the increase in duty. It was made perfectly clear during the debate that whilst those Amendments for reasons, which I recollect moved me at one time, are in this form, no hon. Member is really very strongly attached to the form but is more concerned to be able to bring forward the point within the rules of order. In fact it has been the practice of successive Governments in dealing with this matter; if they have found it right and proper to make some variation, to make it not in the form proposed—that is by alleviation of the rate of duty—but by way of some fixed form of grant. That was the form followed, in respect of motor cars, by the last Government.

    For that reason, I do not think I need detain the Committee by pointing out the reasons why this has always been done. Obviously, a state of affairs was created in which a relatively small quantity of petrol was taxed by reference to its use in particular vehicles at a lower rate, it would create not merely the administrative difficulties to which the hon. Member for Bermondsey (Mr. Mellish) referred, but a great deal of trouble not only to the servants of the State in administering it, but also to the beneficiaries, who would be compelled to keep records.

    For that reason, as the Committee are aware, when this Petrol Duty was increased in the Budget of my right hon. Friend the line was taken in respect of motor cars that the proper way to deal with the matter was by way of an increased grant. As the Committee are aware, my hon. Friend the Minister of Pensions, on 9th April, informed the House that the grant was being raised, because of the rise in Petrol Duty, by £4 10s. a year from £52 10s. to £57 a year. In relation to the increase in duty, my hon. Friend was following substantially the line taken in the last two years by his predecesssors.

    The Committee may care to recall that when, in 1950, the duty was increased by 9d. a gallon, the allowance was increased by £5 from £45 to £50, and last year, when there was a smaller increase of 4½d. per gallon of petrol, the grant was increased by £2 10s. So this year, in respect of an increase in duty of 7½d., the grant has been increased by £4 10s. from £52 10s. to £57. In regard to the second of the two Amendments we are now discussing, I think most hon. Members will agree that that is the practical and satisfactory way of dealing with the matter.

    The first Amendment relates to invalid chairs, about which there has been considerable discussion. The position with respect to these invalid chairs is that no financial grant is made. My hon. Friend issues them and, I understand, maintains them, but no financial grant has been made in respect of them at any time. My hon. Friend issues them in a dual capacity. He issues them direct to the Service disability pensioners for whom he, as Minister, is responsible; and also, as agent for the Minister of Health, he issues them to what I may describe for this purpose as civilian disability casualties.

    It is no doubt because there is no financial grant made in respect of these chairs that when the Petrol Duty was raised by the former Administration on the two occasions I have mentioned, in 1950 and in 1951, whereas a compensating figure was added to the grant to motor car users, no step was taken to mitigate the effect of the rise in duty upon those who use these chairs.

    I have no doubt that was the main reason, as was also the fact that these chairs do a considerably larger mileage to the gallon than does the motor car. Be that as it may, the late Government, though they could, and felt able to compensate those with motor cars, they did not take steps in respect of those with chairs.

    My hon. Friend the Minister of Pensions has been examining this matter and has found it necessary to look at the two classes of persons for whom chairs are issued from different points of view. The Ministry of Pensions has power under various enactments to make cash grants in certain circumstances, and with the concurrence of the Chancellor to those for whom it is responsible. The Minister of Health has no such power and I understand would require legislation to have it.

    In those circumstances it is clearly impossible at the moment to do anything in respect of those chairs issued to the civilian disability casualties. In that respect we feel bound to adopt at present the line that was adopted by the previous Administration. But that difficulty does not arise, as I have made clear, in the case of those Service disability pensioners who are the responsibility of my hon. Friend. He has therefore decided that in all the circumstances of the case, and notwithstanding the precedent to the contrary, it would be proper to make a small grant in respect of the extra cost caused by the rise in Duty; that is to say to seek to fulfil, so far as the Service disability pensioner operating a chair is concerned, the intention of the Amendment.

    The hon. Member for Southampton, Itchen (Mr. Morley) referred to the answer of my hon. Friend about the effect of this increase on the cost of operating the chairs. The figures he gave make it clear that in terms of cash the amount involved is very small. The calculation is complicated by the fact that there are two kinds of chairs, one with weather protection which, as a result of that protection, does fewer miles to the gallon—something in the neighbourhood of 45 to 50 miles—and one without weather protection, which, I understand, does 70 miles to the gallon.

    8.45 p.m.

    The decision to which my hon. Friend has come on behalf of the Government is that in respect of the chair with weather protection and the smaller mileage per gallon there will be an annual grant of £3 a year, and with respect to the other type an annual grant of £2 a year. That, on any reasonable calculation and in accordance with both my figures and those of the hon. Member for Southampton, Itchen, should cover the increased cost of operating these chairs in the ordinary manner, and counterbalance the effect of the rise in the duty.

    Precise details will in due course be communicated by my hon. Friend to those concerned, and it would not be right for me to enter into details of the administrative arrangements which he proposes to make. But it is the intention that this decision should come into effect as quickly as possible, and I am sure that hon. Members with experience of the administration of the Ministry of Pensions know that that Department can move remarkably quickly in such circumstances.

    It is always a pleasure to take part in debates on war pensions, because politics do not enter into them at all and everyone is anxious to do the best they can for those concerned. We do appreciate the offer which has been made and the proposal that those who use the all-weather chair should get a grant of £3 and the other chair users a grant of £2. I presume that the grant of £4 10s. already given to the users of motor cars is in anticipation of this debate and that nothing more will be given in that case.

    The right hon. Gentleman is absolutely correct in that assumption. As he will recall, my hon. Friend made a statement on 9th April, in which I recollect he related directly the increase in respect of motor cars to the increase in the duty in exactly the same way as was done in 1950 and 1951.

    I gathered that, because the Ministry of Pensions does like to anticipate the wishes of the House and to be able to move before they are pressed to do so by resolution and decision.

    I would ask for a little more information about the civilians. I know the difficulties but I would put this to the Committee. Many of these civilians were injured during their service to the country just as the soldiers were. Perhaps they were bombed, or injured while carrying on their work in a factory, and I hope that we can be told something a little more definite about them. I do not think it possible to find any gathering of people who are more cheerful than the fellows who operate these chairs. They may be invalids in their chairs, but I would not like to compete against some of them in the manoeuvres they carry out in their chairs.

    One man may have got his injury while wearing the uniform of the Crown and another while wearing an overall and working in a factory. It seems to me that it will be a little difficult to say that we will give one man something to help him along, but not give anything to the other.

    From the tone of the Financial Secretary I judged that he was not adamant about this aspect, and was not turning down the proposal. He said that there was no power, and that to obtain it would require legislation. I say to the hon. Gentleman that, if he should be able to induce his right hon. Friend the Minister of Health to introduce a short Bill in this House to confer this power, we could give him a guarantee that it would have an unobstructed passage through the House.

    Here is a gift which, so far as the amount is concerned, is as much as could be expected. It is a very fair offer, but there is this disappointment about the civilians, and I would like to know there could be some ray of hope that something would be done to deal with that matter. I assure the hon. Gentleman that we shall accept this concession, and that we shall not try to divide the Committee on the Amendment. We should be especially glad if the Financial Secretary could say that he will try to devise ways and means of making this very small concession, which would be of very great value to everybody concerned.

    Perhaps I should respond, as far as I can, to what the right hon. Gentleman has said on the subject of the civilian chairs. The position is really very difficult, and the only undertaking that I can give tonight is that I will convey what the right hon. Gentleman and hon. Members have said to the Minister of Health; I will see that he is informed of those views.

    I think it is impossible to give any firmer commitment on this point—and I will be quite frank with the Committee—for this reason. Cash payments of this sort are payments for which the Ministry of Health has no arrangements at the moment, and it would be misleading the Committee to say that it is necessarily the case that it will be possible to overcome the real difficulties which exist. All that we can do is to say that what the right hon. Gentleman has said as to the merits of the matter obviously has very great force, and I can also re-assure the Committee, so far as the Treasury are concerned, that the financial element involved is really very small indeed, and not a serious factor in the situation.

    If the Committee would be prepared to leave the matter like that, I will certainly convey what has been said to my right hon. Friend, but I do not want to mislead the Committee into the belief that it will necessarily be possible to do anything before Report stage. Very serious thought will have to be given as to the administrative steps to be taken. Such serious thought will be given, but I would not be playing fair with the Committee if I tried in one way or another to give a firm commitment as to the outcome.

    I thank the Financial Secretary for the concession as far as the Service people are concerned. We are sorry about the others, but we have had his explanation, and we feel sure that he will express to his right hon. Friend and those responsible the deep feeling in the Committee that there should be no difference of treatment between people suffering from the same disabilities.

    Before my hon. Friend asks leave to withdraw the Amendment, may I ask the Financial Secretary whether it is too late to put down an Amendment to the National Health Service Bill, or alternatively, whether or not some such Amendment could not be put down in another place, where it would be given every facility for an easy passage? As to the administrative difficulties, could not the Minister of Pensions act as an agent in this matter, as he already acts as agent concerning wigs and other things?

    All these are aspects of the matter which certainly will be considered, but the hon. Gentleman will not expect me to give a snap answer from this Box on whether or not it would be possible to deal with the matter in the way he has suggested. His suggestion is now on record, and that makes certain that it will be considered.

    In view of the conciliatory attitude of the Financial Secretary, and of the manner in which we have been met part of the way, I beg to ask leave to withdraw the Amendment.

    Amendment, by leave, withdrawn.

    I beg to move, in page 2, line 6, at the end, to insert:

    "except that in the case of aviation spirit supplied for the use of flying and gliding clubs duly authorised and approved by the Minister of Civil Aviation the rate of duty shall be ninepence a gallon and the Treasury may make the necessary regulations for giving effect to this exception."
    I move this Amendment with a certain amount of what I hope is justifiable optimism, and my optimism will be matched by my brevity. The case for these flying clubs has always been supported by interested and informed hon. Members on both sides of the Committee. May I just say that I am sorry that my hon. Friend the Member for Lincoln (Mr. de Freitas) is not here to speak to this Amendment, to which his name is attached, because he has always shown a great interest in this matter, and it is only his official duties that take him away this evening.

    On the previous occasion, a similar Amendment to this was moved by the hon. and learned Gentleman the present Attorney-General. As the support has come equally from both sides, I hope it will have this evening the same encouragement from the Government as it had in previous years from other Governments. The value of the flying clubs has never been in doubt in the House and the Labour Government, despite the very severe financial restrictions under which it was compelled to work after the war, contrived to do all it could to give some sympathetic encouragement to the clubs. We had the A.T.C. scholarship scheme, and the Government contrived to give a rebate of the tax which was imposed on all other users of hydrocarbon oils.

    All the arguments which applied before apply with even greater force today. The current financial stringency affects the flying clubs more severely—and I suppose it affected them earlier—than it is affecting other activities. The aggravation of their financial difficulties is probably only matched by the increasing importance, both present and potential, of the role which they play.

    People sometimes ask me why they are so important. Others ask why individuals who seek their sport in flying should receive financial encouragement more than those who turn to walking or cycling. One answer, with all respect to the cyclist, is that the aviator in time of war is probably in a position to help his country more than is the cyclist as such, although I would not like to belittle the gentleman who might have to ride a bicycle in any future war. It was so last time, and I am sure it would be the same in any future emergency.

    If we are to remain in the forefront of the peoples of the world, we have to remain in the forefront of aviation. I do not think that we can accumulate in this country too much experience in the element of the air. We cannot have too many individuals who spend time in the air, and the more experience we have and the more people who are able to spend time in the air, the more likely are we to throw up the odd individual genius who will spur us on in our progress.

    I do not want to labour these points, but in view of the small amount involved, probably less than £10,000, and in view of the potential advantages and the all-party interest and support that has been given to an Amendment of this character in previous years, I hope the Government will be able to accept it.

    In a few brief words I wish to support this Amendment. Surely it is one of the vital necessities of this country that every possible encouragement and opportunity should be given to our young people to glide and fly. We all know that with rising costs everywhere, that opportunity is becoming increasingly difficult. Should help be given from the Treasury along the lines suggested in this Amendment, it will not cost the Treasury very much, but it will mean a great deal to the gliding and flying clubs many members of which are young people who have very little money to spend and for whom any help would be a great advantage. I very much hope the Government will see their way clear to give this help which I believe will be found of great national advantage.

    9.0 p.m.

    I have much pleasure in supporting this Amendment. The flying clubs which have been in being now for something like 27 years have done nothing but good. They provide a very fine hobby for young men and women at weekends and in the evenings. When they started it was an expensive hobby, and indeed it still is. Nevertheless, London Transport have their own flying club and many classes of people are now able to undertake this important training.

    Before the war we had the Civil Air Guard, and many people laughed at it; but when the war came its membership ran into hundreds of men who performed their flying duties gallantly on active service and in delivering aircraft under Transport Command. It paid a tremendous dividend. I agree with my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) that they were not all young people. There were men of over 50 years of age who did service delivering aircraft in this country.

    This is a cheap form of building up a reserve strength of pilots and it helps to spread air-mindedness amongst the pilots' children and relatives and indeed among the whole population. If ever this country had an opportunity of building up a large merchant service of the air, it is now. That building up is taking place in the United States and in Canada and we must move very rapidly indeed if we are to do the same thing in the air as we did with cargo ships at sea.

    I believe this concession will not cost the Government very much money. We are spending very large sums on defence and this movement can play a greater part in defence than is generally appreciated. I hope that my hon. Friend the Financial Secretary will see his way clear to give this assistance.

    I merely rise to say how pleased I was to see in an answer to a Written Question on 4th April that my hon. Friend the Financial Secretary proposed to give this relief. I assure him that those of us who try to keep our hands in in civil aviation are very grateful indeed that the efforts of the flying clubs are being recognised in this way.

    As my hon. Friend the Member for St. Albans (Mr. J. Grimston) has just pointed out, I think we have already met the substance of this Amendment. Like the previous one, it is in form one to relieve the petrol actually used for this purpose and by these bodies from duty; and for the same reason as was the case on the previous Amendment it has always been thought a much more convenient way to deal with this matter by grant.

    The hon. Member for Lincoln (Mr. de Freitas), whose name actually appears first above this Amendment on the Order Paper, asked the Chancellor of the Exchequer on 4th April:
    "whether he will extend the arrangements made last year to relieve the civil flying clubs of the increased Petrol Duty, so as to relieve them also of the additional duty included in this year's Budget."
    I replied, according to the OFFICIAL REPORT, monosyllabically, but I hope satisfactorily:
    "Yes.—[OFFICIAL REPORT, 4th April, 1952; Vol. 498, c. 172.]
    It is the intention of the Government to follow the procedure of last year and by way of grant to compensate the bodies referred to in the Amendment for the full increase in the Petrol Duty. The cost will be some £9,000 in the present year and £11,000 in a full year, so the figure that the hon. Member for Uxbridge (Mr. Beswick) gave was substantially correct. I hope that meets the point. I need only add that one very good reason for doing this is that we accept what has been said on both sides of the Committee as to the valuable purpose served by these clubs.

    Amendment, by leave, withdrawn.

    I beg to move, in page 2, line 6, at the end, to insert:

    "Provided that this subsection shall not authorise any increase in the rate of duty on diesel oil."
    This Amendment will cover a somewhat wider field than the two previous Amendments. It covers very largely the section of the transport industry in which heavy goods vehicles and heavy passenger vehicles are used. It is in those fields that the compression ignition engine has found its most useful metier, and where it operates to the best advantage. At the present time there is some alarm in transport circles—more perhaps than there has been previously—with regard to this duty.

    Another factor which has caused some alarm among passenger vehicle operators is one to which I understand reference was made a few moments ago; that is the possibility of some further imposition on road transport to deal with the cost of railway tracks. The experience of road operators in relation to the money collected ostensibly for the upkeep of roads will not give them much heart to subscribe towards the railway tracks if they do not do any better than the roads have done. Quite apart from that, such an imposition would be strongly resisted as being quite unfair, and I hope that we shall hear from the Financial Secretary something which will allay to some extent the alarm which has been created.

    The effect of this Amendment would be to allay many of the fears which are felt by all sections of the community about the possibility of further increased fares due to the increased tax on fuel. Although the number of vehicles operating on Diesel engines is relatively small compared with the general run of motor vehicles, their proportionate value from the point of view of passenger and goods carrying is relatively high. For that reason we attach considerable importance to this matter and we hope the Chancellor will be able to accept this Amendment.

    Vehicles operating on Diesel oil are used mostly for heavy transport and, therefore, they involve the question of capital costs as against consumer costs. The effect of an increased Petrol Duty on consumer costs is not so permanent as a tax which has a bearing on capital costs—for example, in the case of heavy transport with all its ramifications throughout the industry, for the effect is felt for a long time, even after the tax is no longer there, because it increases the capital costs, the interest costs, and so on.

    I imagine that the Government do not want to do something of this nature which will have a fairly permanent effect. I can understand them saying, "We want some more money; we will put a penny on a pint of beer." One drinks the beer and that is the end of it. There is no subsequent effect. [HON. MEMBERS: "There is."] Well, not on one pint of beer, at any rate. We should not worry too much about that, although we might grumble about it.

    One of the things that I always opposed in connection with heavy transport was the imposition of Purchase Tax. I thought it was a bad tax on commercial vehicles because it added to the capital cost and entered very heavily into capital costs generally. In a heavy goods vehicle at the present time the fuel tax and Purchase Tax alone, with no other costs, amount to 4d. a mile. That, before one begins to meet any expenditure, is a pretty heavy imposition. I hope it will not go any further and that we might even hope to see some reduction as a result of this Amendment.

    With regard to the cost, the British Road Federation have examined this matter and they estimate that about 1,150,000 tons of Diesel oils are used for road transport. By "Diesel oils" I refer specially to Diesel oils as used in the compression ignition engines for road vehicles as against other types of heavy fuel oils. It is anticipated that this relief, if it were granted, would cost only £9½ million. That sum, as against the £60 million odd which is, I believe, the total amount to be collected from this tax, should not be a matter which is beyond the possibility of the Exchequer to meet; but the corresponding advantage would be out of all proportion, because it would be spread over those particular sections where it would be to the greatest possible advantage.

    There might be an argument with regard to some types of transport such as light delivery vans and vans of that nature. I think most people who operate them appreciate that they are not very efficient. Small parcel vans usually operate at very considerable cost and it might be argued that if they had to pay more for fuel it might tend towards economy.

    I do not think that can be said of the large major companies concerned with heavy transport, including the British Road Services; nor even of C licence holders of heavy goods vehicles, and certainly not of the major passenger transport undertakings, which have to keep a very careful watch upon their operating costs. Therefore, I do not think it can be said that any additional tax could reasonably lead to any further economies in their operation. I think they have done everything they possibly can in that direction.

    I would remind the Committee that the early development of the compression ignition engine was encouraged largely by the fact that the tax on fuel oils was only a penny a gallon. It remained at that figure until 1935, and that gave a tremendous impetus to the development of the compression ignition engine. The effect of that has been felt very largely on the more efficient transport systems. The efficiency of this engine is greater than that of the ordinary petrol type engine in relation to its fuel consumption.

    That is a very important point. If we want economy in fuel we should obviously be encouraging some of the types of fuel which will give the greatest economy in use. Taking a double-deck bus as an example, the average oil consumption would probably be in the neighbourhood of 10 miles a gallon on the ordinary type of operation, and rather more on long-distance operations. A similar vehicle in use before the introduction of the compression ignition engine would operate at something like seven miles to the gallon, which was thought to be a fairly good average. Sometimes it was as low as six miles a gallon, although occasionally it went up to eight. I think we can take a comparison between 10 and seven miles to the gallon as being a fair one throughout the whole range of similar types of engine of similar power output, for the compression ignition engine and the ordinary petrol type engine respectively.

    It seems to me that if we want to encourage economy in fuel we ought to do everything possible to encourage the development of the compression ignition engine, even in ranges of vehicles to which it does not at present apply. In other words, even in lighter types of vehicle, we badly need a type of engine which will give greater fuel consumption.

    9.15 p.m.

    The effect of that development would vastly offset any possible effect of a reduction in taxation, because it would provide what I understand is one of the things for which the Chancellor is looking—a reduction in our dollar purchases of oil. It would also help considerably in Diesel development for locomotive purposes, and that, of course, is another angle of development which ought to be encouraged. I hope it may be possible to give a further impetus to this type of development by means of a reduction in the tax from its present figure.

    I believe that in the Department there is some sort of argument going on about whether or not we want to encourage the development and the use of this type of fuel oil. It is being argued, I understand, that the development of jet engines is causing a position to arise in which there may well be a surplus of the higher octane spirits, because in the cracking of the oil the development stage is such that it throws off a number of types of fuel at different levels. It may well be that a reduction in the use of piston-engined aircraft would leave us with a surplus in that direction. I hope that that argument will not be developed, and will not be allowed to develop very far in the Department to the detriment of the further development of the compression ignition engine, which is a safer unit, has a longer life than the petrol engine, and has all the grounds for encouraging its use in the future.

    I have made, I hope, some case, as good as I may—perhaps slightly technical—for the Amendment which I have moved. I do not move it in a strictly political sense but because I believe it to be in the best interest of transport. Moreover, I believe that it is in the best interests of the future development of efficient types of vehicles which, after all, must be the desire of hon. Members in all parts of the Committee.

    I am very pleased indeed to be able to say a word this evening about the effect of this subsection on bus fares—this time, in particular, bus fares in the second city of England and not in the first city. So much has been said tonight about the effect of the Petrol Duty on bus fares in London that I think it is about time someone drew attention to the position in Birmingham and showed exactly what is going to happen there.

    If this Amendment were accepted, it would be of enormous help to Birmingham in a situation which is becoming very difficult indeed. In the first place, the position of Birmingham city transport is as follows. Already the department are running at a considerable loss, and I have no hesitation in saying that I should have been quite as pressing on this question of Diesel oil if I had been in the last House of Commons as I am at the moment, because there is no doubt at all that it is this taxation which is making Birmingham's transport difficulties even worse.

    As I am reminded, they used to run at a profit. The position today is that the estimated deficit at 31st March, 1952—that is, only one month ago—was some £410,000. The effect of this Clause will be, because all the buses in Birmingham run exclusively on Diesel oil, to make that deficit increase by another £187,500. That means, because of the accumulating results of taxation over the last few years on Diesel oil, that in Birmingham we are going to have to face very shortly, a 10 per cent. increase in fares.

    That is an enormous figure. If the British Transport Commission had ever at one time asked for a 10 per cent. increase or more, there would have been a considerable outcry, but in Birmingham, to get the thing balanced, never mind making a profit, we shall need now something like a 10 per cent. increase. Every £200,000 is, I am told, a 3 per cent. increase, and the deficit is to be increased to about £600,000. That is an enormous burden.

    Consider my own constituency. This is the real reason I am raising the matter, because this is of particular concern to constituencies on the outskirts of the big cities. This is a tax, in effect, on the travelling public particularly in outlying areas, because they depend to an enormous extent on transport to take them into the city and, perhaps, over to the other side of it.

    It is often thought that, because I have the Austin works in my constituency, with 20,000 employees, I must have people converging on their place of work from quite near by. In fact, however, there are literally thousands of people who pour into those works from the other side of Birmingham, from Bromsgrove, and from all over the Midlands. They come in from the Black Country, some in special buses, some in cars, and some by the ordinary transport. At the same time, many people in my constituency go outside it to work. It is an area where there is an enormous amount of travelling. Practically no one works in his own constituency.

    What does it mean? It would not be so bad if we were facing a normal rise in transport costs and fares, but this means that in Birmingham, for example, the increased costs and fares resulting from the tax on Diesel oil will constitute a most pressing reason why the trade unions will be demanding increases in wages. And good luck to them. I have no reason at all to be saying they should not be pressing for increased wages. I do not want to be strongly partisan because I am hoping for a concession, but I am very tempted to say that no one could blame the trade unions, because the whole effect of this Budget has been to incite them to demand wage increases. There are the increased fares, the concession to taxpayers above the £1,000 limit, and the general increased difficulties of taxpayers with the lower incomes.

    Will the hon. Gentleman say when the bus company last made a profit? He did say it made a profit. In what year?

    I have not the figures. I have only the fact that in 1951 there was a deficit of £200,000. If the hon. and gallant Gentleman is saying that I should, therefore, be blaming the last Government too, then in this respect, at least, I agree with him.

    Birmingham is one of the areas which has got to make a considerable contribution to the export trade. We in the engineering industries have got to make up for some of the shortfall in the export of textiles, for example. What help is it going to be for this whole area to be faced with demands for increased wages and prices at a time when the sellers' market has disappeared or is finally disappearing? We are going to be faced with wage demands throughout the country, in the engineering industry and certainly in the whole of the Birmingham area where transport costs for the ordinary individual are going to go up, and it will cost more for them to move about this large area. That is the second factor directly inciting further wage demands.

    In the second city of the Kingdom, never mind the first, which has already been mentioned during the earlier parts of this debate, the result of the accumulated effect of this tax is to be a 10 per cent. increase in transport fares, and that will possibly be more when all the other increases which the Budget is imposing reveal their full effect. I hope Diesel oil can be exempted from the tax because it would make a considerable difference and would help not only the family budgets, but would stem some of the wage demands, and thus help to a considerable extent a very important and a very large area of this country.

    This Amendment has been moved in two very reasonable, moderate and persuasive speeches, but the speakers have taken a totally different line. The first speech by the hon. Member for Southall (Mr. Pargiter) was based upon the desirability of giving special encouragement to one type of vehicle and engine using one type of fuel as against another. The hon. Member for Northfield (Mr. Chapman), put his case on rather different grounds. I should like first to refer to the arguments put forward by the hon. Member for Southall.

    In order to put the matter in its proper perspective, it is well to remember that this Amendment, if passed, would involve the Revenue in a loss of £9 million, a very substantial sum. It would also have the effect of giving a considerably greater advantage to passenger vehicles than to goods vehicles. In fact, of the Diesel oil—

    As I understood it, we are considering two Amendments together. One is concerned with an exemption for Diesel oil and the other with an exemption of passenger-carrying vehicles. Is that ruled out of order, or are we doing that?

    No, I did not rule the first Amendment out of order. I thought the second Amendment was a wider Amendment and selected it because all the arguments which might have been used in support of the first Amendment could be used on the second, which covers a much wider field.

    If that is so, the Minister of State for Economic Affairs is not quite accurate, because the Amendment moved embraced the larger issue of Diesel oil and it does not affect passenger vehicles only. In fact, some of these vehicles are interchangeable, but the point I am making is that this applies to goods vehicles as well as passenger vehicles, and if the right hon. Gentleman is putting the case that goods vehicles do not run on Diesel oil, then I think he is wrong.

    I am going to refer to passenger vehicles later on, but at the moment I am dealing with what the hon. Member for Southall said about the desirability, as he thought, of giving special encouragement to one type of engine using Diesel oil as against petrol. When I have answered his arguments to the best of my ability, I shall come to the arguments of the hon. Member for Northfield, who was particularly concerned with passenger vehicles.

    Taking this Amendment in its full scope, and as the mover argued it, it would, as I have already said, involve a loss to the Revenue of £9 million, which is a very considerable loss indeed and more than we are prepared to face. If the Amendment were passed in this form and not in the more limited form, it would incidentally give greater advantage to passenger vehicles than to goods vehicles because a smaller proportion of goods than passenger vehicles use Diesel oil. The actual totals are that 775,000 tons of oil are used by passenger vehicles and a little less than half of that amount by goods vehicles.

    9.30 p.m.

    The case made by the hon. Gentleman was really that because Diesel engines use less oil per mile we should do something by way of a special remission to encourage that type of engine. That is a very undesirable form of encouragement. That more miles are obtained out of Diesel engines than out of petrol engines is a natural advantage which influences people in choosing the form of engine they prefer. It is one of the factors determining the proportions in which petrol and Diesel engines are built.

    The right hon. Gentleman no doubt appreciates that the capital cost of Diesel vehicles is very much higher.

    I quite agree, but all these factors come into the calculation of the man who is choosing what sort of vehicle he will buy, and determine the proportions in which Diesel and petrol vehicles are built. Incidentally and accidentally we give some form of encouragement to the Diesel as against the petrol engine. The mere fact that the Diesel engine uses less oil per mile means that an increase in an oil tax applying to both engines alike increases that advantage. I might, if I were going to be pedantic, say that in order not to start a distorting influence we might propose to correct that advantage, but I do not develop that argument.

    It is extremely undesirable that the type of engine for one class of vehicle or another should be determined not by the real economic advantage conferred by the vehicle whose fuel gives more miles, but by the further calculation that by choosing, say, a Diesel rather than a petrol engine the purchaser and the maker would escape some tax which would otherwise be paid. That would be undesirable not only because of the revenue which would be lost, but because it would determine that Diesel engines might be chosen for work for which petrol engines would be more suitable. It would be undesirable deliberately to introduce that distorting factor into the influences which determine the design and choice of vehicles for different sorts of traffic.

    Now I will say a word or two about the arguments of the hon. Member for Northfield, who was supporting the Amendment but spoke as if he were supporting an Amendment which was not called and by which a special preference was to be given to passenger as distinct from goods vehicles. If the Amendment had been so restricted, it would have meant a smaller loss of revenue, some £6½ million instead of £9 million, but there would have been an even more indefensible form of discrimination between one class of road user and another, between those who carry goods and those who carry passengers. In general I thought practically the entire argument of the hon. Gentleman was one against the increase in tax which is introduced in the Budget, that is to say, the question that was debated earlier this evening and upon which the Committee has voted.

    If the right hon. Gentleman will allow me, I was saying that in the case of bus fares, which are a common charge for the whole community, it is really inciting wage increases and all the bad consequences that follow, whereas the general tax on petrol is to some extent a luxury tax and therefore would not have that general effect.

    I would not agree with the hon. Member that the general tax on petrol, covering the bulk of the lorry traffic of this country, could be regarded as in any sense a luxury tax.

    I do not think the hon. Member has made a case for discriminating between the carriage of passengers and the carriage of goods. I think his argument could be fairly described by saying that it was really addressed to the harm caused by the increase in tax which has been proposed, and was not an argument for this Amendment. It is true that if this Amendment were carried some of the revenue we are obtaining would be lost and that for certain classes of transport the burden would be somewhat reduced. Essentially, however, his argument was one against an increase in tax, and that we disposed of earlier.

    Taking the Amendment as it was proposed, it would be highly undesirable to give a special form of exemption, even apart from the loss of revenue that would involve in order deliberately to weight the scales in favour of one kind of vehicle as against another and to weight the scales against one set of manufacturers who make one type of vehicle as against those who make another.

    May I draw the attention of the right hon. Gentleman to the fact that the scales were deliberately weighted to increase the development of the compression ignition engine because it was found to be a more efficient unit and, in operation, much more economical in the use of fuel? Therefore, it would not be creating a new precedent; it would be continuing something that has already been done.

    I do not want to go back into history beyond saying that some precedents are good and some are not so good. I do not think it would be well to add to the natural advantages which are possessed by the Diesel engine, of being able to go more miles for a given amount of oil, a further deliberate subsidy of a kind in order to encourage one type of vehicle rather than another, a type of vehicle which would not otherwise have been chosen by the user or made by the manufacturer.

    In my own experience users generally are anxious for a reliable lighter Diesel engine which will give them that economy in fuel which they look for so much.

    In that case there is the natural advantage already, which is retained and which is to some extent increased inasmuch as the increase proposed in the Budget is general. I will not develop that point further except to add that the hon. Member made one mistake. He gave as one of the reasons for this Amendment that it would encourage the use of Diesel locomotives. If he meant locomotives by road, his argument is relevant. If, however, he meant locomotives on rails, as I think he did, that is not relevant because they are already exempt, and therefore this Amendment is not required to attain the end desired by the hon. Member.

    For those reasons, I should not agree with the arguments put forward by the mover of the Amendment. As regards the hon. Member for Northfield, I think that his arguments were addressed rather to a point which we have already debated and decided. I am therefore unable to accept the Amendment.

    Watching ice hockey on television from time to time, one is always interested in seeing during the play a number of players going off and a fresh lot of players coming on. In the last hour the players who were with us earlier have departed, and in has come the Minister of State for Economic Affairs and the Chancellor of the Exchequer himself, presumably to keep a fatherly eye upon his Minister of State. I have been thinking that it would have been better had the Government left the Financial Secretary with us, because we were getting on splendidly with him and, probably, the Government would get the Clause very much quicker had their original team been left.

    I have been rather surprised at the right hon. Gentleman's excursions into the technicalities of the Diesel engine versus the ordinary combustion engine. Any engineers who read what the Minister of State has had to say, will be extremely surprised that he ever ventured into those fields.

    The Government have found themselves in great difficulties lately with regard to fares. They have found themselves in great muddle and confusion, not knowing where they were going; and if Dame Rumour is to be believed, there is already one Ministerial casualty as a result. I should have thought that nothing would have been done by the right hon. Gentleman to increase fares as the Government's proposal will obviously increase them. We on this side of the Committee are helping the Government to try to get back a little of the popularity that they once had for a fleeting moment, and we are urging them to keep fares down.

    The right hon. Gentleman was talking about the buses in Birmingham. There are 1,497 Diesel-engined buses there, and the extra cost for them will be £149,700.

    I will accept the higher figure. I was merely quoting the figure that has been given to me. The fact is that the increase is considerable. Obviously, fares will be affected, because there are increases in other commodities, and I am very surprised that the Government have not taken the opportunity of the get-out which we have provided in the Amendment in order to keep fares down.

    There are two other features. The Government are interested in the export trade and in encouraging agriculture. They must know that more and more goods are being conveyed to the docks for shipment by lorries driven by Diesel engines, and that this proposal will acid to the cost of transport. The Government must know that more and more in agriculture the Diesel engine is being used and that it must add to agricultural costs.

    Therefore, by not looking at this matter and examining it to see whether they can find a method of exempting Diesel oil, the Government are shutting their eyes to the possibility of helping the export trade, of helping the fares position, and of helping agriculture. I am surprised that they have not taken advantage of the opportunity we have given.

    9.45 p.m.

    The hon. Member said that I had plunged into technicalities which apparently I did not understand. Will he please give one instance? He has so far said nothing which is inconsistent with what I said as regards the technical side of this question. Would he address himself to the question as to the desirability of making a distinction between the tax on Diesel oil and the tax on petrol which, after all, is the point of this Amendment?

    Apparently the right hon. Gentleman thinks he is still on the Opposition side of the Committee if he wants me to spend a great deal of time in answering those questions. I was helping him by skating over those matters into which my hon. Friends have gone in great detail. He said that a distinction is made in connection with locomotives. If he puts on his thinking cap he will find some method of making a distinction for users of Diesel oil.

    But this is a distinction between road users. The Amendment desires to give a special advantage to a particular form of road vehicle as against another form of road vehicle, and surely the case for the Amendment is to show that that distinction is desirable.

    It is a pity the right hon. Gentleman was not here earlier. Of course he may not know, because he may not have read the Treasury papers today,

    Division No. 108.]


    [9.50 p.m.

    Acland, Sir RichardBarnes, Rt. Hon. A. J.Boardman, H.
    Adams, RichardBartley, P.Bottomley, Rt. Hon. A. G.
    Albu, A. H.Bellenger, Rt. Hon. F. J.Bowden, H. W.
    Allen, Arthur (Bosworth)Bence, C. R.Bowen, E. R.
    Anderson, Frank (Whitehaven)Benn, WedgwoodBraddock, Mrs. Elizabeth
    Attlee, Rt. Hon. C. R.Benson, G.Brockway, A. F.
    Awbery, S. S.Beswick, F.Brook, Dryden (Halifax)
    Ayles, W. H.Bevan, Rt. Hon. A. (Ebbw vale)Broughton, Dr. A. D. D.
    Bacon, Miss AliceBing, G. H. C.Brown, Rt. Hon. George (Belper)
    Baird, J.Blackburn, F.Brown, Thomas (Ince)
    Balfour, A.Blyton, W. R.Burke, W. A.

    that about half an hour ago a concession was given in relation to invalid tricycles. It was pointed out to us by the Financial Secretary that the Treasury could only give the concession in respect of ex-Service disabled persons using tricycles because it was only the Minister of Pensions who had power to make grants in respect of those persons and he was unable much as he would like, to give a similar concession to civilian disabled who had the use of tricycles.

    What the right hon. Gentleman has just said in relation to Diesel oil versus petrol is that his hon. Friend should not have made the concession because the concession would not be made to both kinds of people who are disabled and the only difference is that one kind were disabled in war and the other in the factories. It is not a good argument to say that I must now show the right hon. Gentleman just how to make the difference between the petrol and the Diesel engine.

    I say that Diesel oil enters very much indeed into passenger fares and for that reason and that reason alone it would be a good thing to exempt it. It enters into agriculture and for that reason and that reason alone it would be a good thing to exempt it. It enters very much into the carrying of heavy goods to the ports in connection with our export trade, and for that reason it would be worth while trying to find a method of exempting it from the duty. I regard the intervention of the right hon. Gentleman as foolish in view of what his hon. Friend has done in the Committee half an hour ago, and I propose that we should now pass to the next stage and record our objection to the reply he has made and the lack of effort to do anything in this matter, by going into the Division Lobby.

    Question put, "That those words be there inserted."

    The Committee divided: Ayes, 266 Noes, 284.

    Burton, Miss F. E.Holt, A. F.Price, Philips (Gloucestershire, W.)
    Butler, Herbert (Hackney, S.)Houghton, DouglasProctor, W. T.
    Callaghan, L. J.Hoy, J. H.Pryde, D. J.
    Carmichael, J.Hubbard, T. F.Pursey, Cmdr. H.
    Castle, Mrs. B. A.Hudson, James (Ealing, N.)Reeves, J.
    Champion, A. J.Hughes, Cledwyn (Anglesey)Reid, Thomas (Swindon)
    Chapman, W. D.Hughes, Emrys (S. Ayrshire)Reid, William (Camlachie)
    Chetwynd, G. R.Hughes, Hector (Aberdeen, N.)Rhodes, H.
    Clunie, J.Hynd, H. (Accrington)Richards, R.
    Cocks, F. S.Hynd, J. B. (Attercliffe)Robens, Rt. Hon. A.
    Coldrick, W.Irvine, A. J. (Edge Hill)Roberts, Albert (Normanton)
    Collick, P. H.Irving, W. J. (Wood Green)Roberts, Goronwy (Caernarvonshire)
    Cook, T. F.Isaacs, Rt. Hon. G. A.Rogers, George (Kensington, N.)
    Corbet, Mrs. FredaJanner, B.Ross, William
    Cove, W. G.Jay, Rt. Hon. D. P. T.Royle, C.
    Craddock, George (Bradford, S.)Jager, George (Goole)Schofield, S. (Barnsley)
    Crosland, C. A. R.Jeger, Dr. Santo (St. Pancras, S.)Shackleton, E. A. A.
    Crossman, R. H. S.Jenkins, R. H. (Stechford)Shawcross, Rt. Hon. Sir Hartley
    Cullen, Mrs. A.Johnson, James (Rugby)Shinwell, Rt. Hon. E.
    Dalton, Rt. Hon. H.Johnston, Douglas (Paisley)Short, E. W.
    Darling, George (Hillsborough)Jones, David (Hartlepool)Shurmer, P. L. E.
    Davies, A. Edward (Stoke, N.)Jones, Frederick Elwyn (West Ham, S.)Silverman, Julius (Erdington)
    Davies, Ernest (Enfield, E.)Jones, Jack (Rotherham)Simmons, C. J. (Brierley Hill)
    Davies, Harold (Leek)Jones, T. W. (Merioneth)Slater, J.
    Davies, Stephen (Merthyr)Keenan, W.Smith, Ellis (Stoke, S.)
    Deer, G.Kenyon, C.Smith, Norman (Nottingham, S.)
    Delargy, H. J.Key, Rt. Hon. C. W.Sorensen, R. W.
    Dodds, N. N.King, Dr. H. M.Soskice, Rt. Hon. Sir Frank
    Donnelly, D. L.Kinley, J.Sparks, J. A.
    Driberg, T. E. N.Lee, Frederick (Newton)Steele, T.
    Dugdale, Rt. Hon. John (W. Bromwich)Lee, Miss Jennie (Cannock)Stokes, Rt. Hon. R. R.
    Ede, Rt. Hon. J. C.Lever, Harold (Cheetham)Strauss, Rt. Hon. George (Vauxhall)
    Edelman, M.Lever, Leslie (Ardwick)Summerskill, Rt. Hon. E.
    Edwards, John (Brighouse)Lewis, ArthurSwingler, S. T.
    Edwards, Rt. Hon. Ness (Caerphilly)Lindgren, G. S.Sylvester, G. O.
    Edwards, W. J. (Stepney)Logan, D. G.Taylor, Bernard (Mansfield)
    Evans, Albert (Islington, S.W.)MacColl, J. E.Taylor, John (West Lothian)
    Evans, Edward (Lowestoft)McGhee, H. G.Taylor, Rt. Hon. Robert (Morpeth)
    Evans, Stanley (Wednesbury)McInnes, J.Thomas, David (Aberdare)
    Ewart, R.McKay, John (Wallsend)Thomas, George (Cardiff)
    Fernyhough, E.McLeavy, F.Thomas, Iorwerth (Rhondda, W.)
    Field, W. J.McNeil, Rt. Hon. H.Thomas, Ivor Owen (Wrekin)
    Fienburgh, W.MacPherson, Malcolm (Stirling)Thurtle, Ernest
    Finch, H. J.Mainwaring, W. H.Tomney, F.
    Fletcher, Eric (Islington, E.)Mallalieu, E. L. (Brigg)Turner-Samuels, M.
    Follick, M.Mallalieu, J. P. W. (Huddersfield, E.)Ungoed-Thomas, Sir Lynn
    Foot, M. M.Manuel, A. C.Usborne, H. C.
    Forman, J. C.Marquand, Rt. Hon. H. A.Viant, S. P.
    Fraser, Thomas (Hamilton)Mayhew, C. P.Wade, D. W.
    Freeman, John (Watford)Mellish, R. J.Wallace, H. W.
    Freeman, Peter (Newport)Messer, F.Watkins, T. E.
    Gaitskell, Rt. Hon. H. T. N.Mikardo, IanWebb, Rt. Hon. M. (Bradford, C.)
    Gibson, C. W.Mitchison, G. R.Weitzman, D.
    Glanville, JamesMonslow, W.Wells, Percy (Faversham)
    Gooch, E. G.Moody, A. S.Wells, William (Walsall)
    Gordon Walker, Rt. Hon. P. C.Morgan, Dr. H. B. W.West, D. G.
    Greenwood, Anthony (Rossendale)Morley, R.Wheatley, Rt. Hon. John
    Greenwood, Rt. Hon. Arthur (Wakefield)Morris, Percy (Swansea, W.)White, Mrs. Eirene (E. Flint)
    Grey, C. F.Morrison, Rt. Hon. H. (Lewisham, S.)White, Henry (Derbyshire, N.E.)
    Griffiths, David (Rother Valley)Moyle, A.Whiteley, Rt. Hon. W.
    Griffiths, Rt. Hon. James (Llanelly)Mulley, F. W.Wigg, George
    Griffiths, William (Exchange)Murray, J. D.Wilcock, Group Capt. C. A. B.
    Grimond, J.Neal, Harold (Bolsover)Wilkins, W. A.
    Hale, Leslie (Oldham, W.)Noel-Baker, Rt. Hon. P. J.Willey, Frederick (Sunderland, N.)
    Hall, Rt. Hon. Glenvil (Colne Valley)Oldfield, W. H.Willey, Octavius (Cleveland)
    Hall, John (Gateshead, W.)Oliver, G. H.Williams, David (Neath)
    Hamilton, W. W.Orbach, M.Williams, Rev. Llywelyn (Abertillery)
    Hannan, W.Oswald, T.Williams, Ronald (Wigan)
    Hardy, E. A.Padley, W. E.Williams, W. R. (Droylsden)
    Hargreaves, A.Paling, Rt. Hon. W. (Dearne Valley)Williams, W. T. (Hammersmith, S.)
    Harrison, J. (Nottingham, E.)Paling, Will T. (Dewsbury)Winterbottom, Ian (Nottingham, C.)
    Hastings, S.Pannell, CharlesWinterbottom, Richard (Brightside)
    Hayman, F. H.Pargiter, G. A.Woodburn, Rt. Hon. A.
    Healey, Denis (Leeds, S.E.)Parker, J.Wyatt, W. L.
    Henderson, Rt. Hon. A. (Rowley Regis)Paton, J.Yates, V. F.
    Herbison, Miss M.Peart, T. F.
    Hewitson, Capt. M.Plummer, Sir LeslieTELLERS FOR THE AYES:
    Hobson, C. R.Porter, G.Mr. Pearson and Mr. Holmes.
    Holman, P.Price, Joseph T. (Westhoughton)


    Aitken, W. T.Amery, Julian (Preston, N.)Arbuthnot, John
    Allan, R. A. (Paddington, S.)Amory, Heathcoat (Tiverton)Ashton, H. (Chelmsford)
    Alport, C. J. M.Anstruther-Gray, Major W. J.Assheton, Rt. Hon. R. (Blackburn, W.)

    Astor, Hon. J. J. (Plymouth, Sutton)Gough, C. F. H.Mellor, Sir John
    Astor, Hon. W. W. (Bucks, Wycombe)Gower, H. R.Molson, A. H. E.
    Baker, P. A. D.Graham, Sir FergusMoore, Lt.-Col. Sir Thomas
    Baldock, Lt.-Cmdr. J. M.Gridley, Sir ArnoldMorrison, John (Salisbury)
    Baldwin, A. E.Grimston, Hon. John (St. Albans)Mott-Radclyffe, C. E.
    Banks, Col. C.Grimston, Sir Robert (Westbury)Nabarro, G. D. N.
    Barber, A. P. L.Harden, J. R. E.Nicholls, Harmar
    Barlow, Sir JohnHare, Hon. J. H.Nicholson, Godfrey (Farnham)
    Baxter, A. B.Harris, Frederic (Croydon, N.)Nicolson, Nigel (Bournemouth, E.)
    Beach, Maj. HicksHarris, Reader (Heston)Nield, Basil (Chester)
    Bell, Philip (Bolton, E.)Harrison, Col. J. H. (Eye)Noble, Cmdr. A. H. P.
    Bell, Ronald (Bucks, S.)Harvey, Air Cdre. A. V. (Macclesfield)Nugent, G. R. H.
    Bennett, F. M. (Reading, N.)Harvey, Ian (Harrow, E.)Oakshott, H. D.
    Bennett, Dr. Reginald (Gosport)Harvie-Watt, Sir GeorgeOdey, G. W.
    Bennett, William (Woodside)Hay, JohnO'Neill, Rt. Hon. Sir H. (Antrim, N.)
    Bevins, J. R. (Toxteth)Head, Rt. Hon. A. H.Orr, Capt. L. P. S.
    Birch, NigelHeald, Sir LionelOrr Ewing, Charles Ian (Hendon, N.)
    Bishop, F. P.Heath, EdwardOrr-Ewing, Ian L. (Weston-super-Mare)
    Black, C. W.Higgs, J. M. C.Osborne, C.
    Boothby, R. J. G.Hill, Dr. Charles (Luton)Partridge, E.
    Bossom, A. C.Hill, Mrs. E. (Wythenshawe)Peaks, Rt. Hon. O.
    Boyd-Carpenter, J. A.Hinchingbrooke, ViscountPerkins, W. R. D.
    Boyle, Sir EdwardHirst, GeoffreyPeto, Brig. C. H. M.
    Braine, B. R.Holland-Martin, C. J.Peyton, J. W. W.
    Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)Hollis, M. C.Pickthorn, K. W. M.
    Brooke, Henry (Hampstead)Holmes, Sir Stanley (Harwich)Pilkington, Capt R. A.
    Brooman-White, R. C.Hopkinson, HenryPitman, I. J.
    Browne, Jack (Govan)Hornsby-Smith, Miss M. P.Powell, J. Enoch
    Buchan-Hepburn, Rt. Hon. P. G. T.Horobin, I. M.Price, Henry (Lewisham, W.)
    Bullard, D. G.Horsbrugh, Rt. Hon. FlorencePrior-Palmer, Brig. O. L.
    Bullock, Capt. M.Howard, Gerald (Cambridgeshire)Profumo, J. D.
    Bullus, Wing Commander E. E.Howard, Greville (St. Ives)Raikes, H. V.
    Burden, F. F. A.Hudson, Sir Austin (Lewisham, N.)Rayner, Brig. R.
    Butcher, H. W.Hudson, W. R. A. (Hull, N.)Remnant, Hon. P.
    Butler, Rt. Hon. R. A. (Saffron Walden)Hurd, A. R.Renton, D. L. M.
    Carr, Robert (Mitcham)Hutchinson, Sir Geoffrey (Ilford, N.)Roberts, Peter (Heeley)
    Carson, Hon. E.Hutchison, Lt.-Cdm. Clark (E'b'rgh W.)Robertson, Sir David
    Cary, Sir RobertHyde, Lt.-Col. H. M.Robinson, Roland (Blackpool, S.)
    Channon, H.Hylton-Foster, H. B. H.Robson-Brown, W.
    Clarke, Col. Ralph (East Grinstead)Jenkins, R. C. D. (Dulwich)Rodgers, John (Sevenoaks)
    Clarke, Brig. Terence (Portsmouth, W.)Jennings, R.Roper, Sir Harold
    Clyde, Rt. Hon. J. L.Johnson, Eric (Blackley)Ropner, Col. Sir Leonard
    Cole, NormanJones, A. (Hall Green)Russell, R. S.
    Colegate, W. A.Joynson-Hicks, Hon. L. W.Ryder, Capt. R. E. D.
    Cooper, Sqn. Ldr. AlbertKaberry, D.Salter, Rt. Hon. Sir Arthur
    Cooper-Key, E. M.Keeling, Sir EdwardSandys, Rt. Hon. D.
    Craddock, Beresford (Spelthorne)Kerr, H. W. (Cambridge)Schofield, Lt.-Col. W. (Rochdale)
    Cranborne, ViscountLambert, Hon. G.Scott, R. Donald
    Crookshank, Capt. Rt. Hon. H. F. C.Lambton, ViscountScott-Miller, Cmdr. R.
    Crosthwaite-Eyre, Col. O. E.Lancaster, Col. C. G.Shepherd, William
    Crouch, R. F.Law, Rt. Hon. R. K.Simon, J. E. S. (Middesbrough, W.)
    Crowder, John E. (Finchley)Leather, E. H. C.Smiles, Lt.-Col. Sir Walter
    Crowder, Petre (Ruislip—Northwood)Legge-Bourke, Maj. E. A. H.Smithers, Peter (Winchester)
    Darling, Sir William (Edinburgh, S.)Legh, P. R. (Petersfield)Smithers, Sir Waldron (Orpington)
    Davidson, ViscountessLennox-Boyd, Rt. Hon. A. T.Smyth, Brig. J. G. (Norwood)
    Deedes, W. F.Lindsay, MartinSnadden, W. McN.
    Digby, S. WingfieldLinstead, H. N.Soames, Capt. C.
    Dodds-Parker, A. D.Lloyd, Rt. Hon. G. (King's Norton)Spearman, A. C. M.
    Donaldson, Cmdr. C. E. McA.Lloyd, Maj. Guy (Renfrew, E.)Speir, R. M.
    Donner, P. W.Lloyd, Rt. Hon. Selwyn (Wirral)Spence, H. R. (Aberdeenshire, W.)
    Doughty, C. J. A.Lockwood, Lt.-Col. J. C.Spans, Sir Patrick (Kensington, S.)
    Douglas-Hamilton, Lord MalcolmLongden, Gilbert (Herts, S.W.)Stanley, Capt. Hon. Richard
    Drayson, G. B.Low, A. R. W.Stevens, G. P.
    Drewe, C.Lucas, Sir Jocelyn (Portsmouth, S.)Steward, W. A. (Woolwich, W.)
    Dugdale, Maj. Rt. Hn. Sir T. (Richmond)Lucas, P. B. (Brentford)Stewart, Henderson (Fife, E.)
    Duncan, Capt. J. A. L.Lucas-Tooth, Sir HughStoddart-Scott, Col. M.
    Duthie, W. S.McCorquodale, Rt. Hon. M. S.Storey, S.
    Eden, Rt. Hon. A.Macdonald, Sir Peter (I. of Wight)Strauss, Henry (Norwich, S.)
    Elliot, Rt. Hon. W. E.Mackeson, Brig. H. R.Stuart, Rt. Hon. James (Moray)
    Errol, F. J.McKibbin, A. J.Studholme, H. G.
    Fell, A.McKie, J. H. (Galloway)Summers, G. S.
    Finlay, GraemeMacLeod, Iain (Enfield, W.)Sutcliffe, H.
    Fisher, NigelMacmillan, Rt. Hon. Harold (Bromley)Taylor, William (Bradford, N.)
    Fleetwood-Hesketh, R. F.Macpherson, Maj. Niall (Dumfries)Teeling, W.
    Fletcher-Cooke, C.Maitland, Comdr. J. F. W. (Horncastle)Thomas, Rt. Hon. J. P. L. (Hereford)
    Fort, R.Maitland, Patrick (Lanark)Thomas, P. J. M. (Conway)
    Foster, JohnManningham-Buller, Sir R. E.Thompson, Kenneth (Walton)
    Fraser, Sir Ian (Morecambe & Lonsdale)Markham, Major S. F.Thompson, Lt-Cdr. R. (Croydon, W.)
    Fyfe, Rt. Hon. Sir David MaxwellMarlowe, A. A. H.Thorneycroft, R. Hn. Peter (Monmouth)
    Gage, C. H.Marples, A. E.Thornton-Kemsley, Col. C. N.
    Galbraith, Cmdr. T. D. (Pollok)Marshall, Douglas (Bodmin)Tilney, John
    Gammans, L. D.Marshall, Sidney (Sutton)Turner, H. F. L.
    Garner-Evans, E. H.Maude, AngusTurton, R. H.
    George, Rt. Hon. Maj. G. LloydMaudling, R.Vane, W. M. F.
    Godber, J. B.Maydon, Lt.-Comdr. S. L. C.Vaughan-Morgan. J. K.
    Gomme-Duncan, Col. A.Medlicott, Brig. F.Vosper, D. F.

    Wakefield, Edward (Derbyshire, W.)Webbe, Sir H. (London & Westminster)Wilson, Geoffrey (Truro)
    Wakefield, Sir Wavell (Marylebone)Wellwood, W.Wood, Hon. R.
    Walker-Smith, D. C.White, Baker (Canterbury)York, C.
    Ward, Hon. George (Worcester)Williams, Rt. Hon. Charles (Torquay)
    Ward, Miss I. (Tynemouth)Williams, Gerald (Tonbridge)TELLERS FOR THE NOES:
    Waterhouse, Capt. Rt. Hon. C.Williams, Sir Herbert (Croydon, E.)Major Conant and Mr. Redmayne.
    Watkinson, H. A.Wills, G.

    The next Amendment, in the name of the hon. Member for Uxbridge (Mr. Beswick), in page 2, line 6, at the end, to insert:

    Provided that as and from the first day of October, nineteen hundred and fifty-two, there shall be allowed from the customs duty imposed by section two of the Finance Act, 1928, a rebate of sevenpence halfpenny a gallon on the delivery for home consumption of any light oils which are used as fuel in a flying machine or in connection with the manufacture and testing of flying machines.
    is fully covered by the following one in the name of the right hon. Member for Leeds, South (Mr. Gaitskell).

    I beg to move, in page 2, line 6, at the end, to insert:

    (2) The provisions of subsection (1) of this section shall not apply to—
  • (a) any white spirit; or
  • (b) any light oils, other than white spirit, which are not used as fuel in mechanically propelled vehicles constructed or adapted for use on roads.
  • I am glad to see the Financial Secretary back in his place, and I hope he is going to deal with this Amendment because we found him so good on the previous one. I am certain that the Government have made up their minds to accept our Amendment because if we go to a Division we shall have the support of the hon. Member for Altrincham and Sale (Mr. Erroll), the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan), the hon. Member for Bury and Radcliffe (Mr. W. Fletcher) and the hon. Member for Edgbaston (Sir P. Bennett), all of whom expressed themselves on this matter in no uncertain terms.

    I do not propose to make a long speech on this Amendment because we have debated this matter on more than one occasion, and I know that hon. Members on this side of the House have particular points to put about particular industries. But I want to say to the Committee that the industrial use of white spirit is widespread in many industries including paint, rubber, dyeing and cleaning, boot and floor polish, gelatine and glue making, linoleum, wallpaper, printing ink and many others. There is a whole host of uses of white spirit in industry generally, and it is important that while we are busily engaged in an export drive, and will be for many years to come, costs should be kept down as much as possible.

    Whilst it may well be proved that the increase is small in relation to the total cost of the product, we must remember that all these small increases add up and probably make such an increase that the manufacturer loses his market abroad. Indeed, those engaged in the export trade today know full well how finely calculated their prices have to be if they are to get orders at all. We feel that with the tax now at 2s. 6d. a gallon we have reached a stage where in many cases the tax is nearly double the wholesale price of the basic raw materials used by such a wide range of industries, and that the time has come to look at this matter very seriously indeed to see whether or not it is possible at this stage to prevent this last increase being passed on to industry in this way.

    I admit that many administrative difficulties may be raised by hon. Members opposite as reasons for not doing that, but I believe it is worth examining. It is important that we should encourage all those in industry who are struggling for export markets and trying to keep down prices on the home market by saying that we will not tax further the raw materials which they use in their manufactures.

    As I have said, hon. Friends of mine will be dealing with specific industries, and, therefore, I do not want to travel over ground which they will be covering in great detail. I will end by saying that we really ought to do what we can to keep down costs, both on the export and home market, and that here is a way in which we can help those who use this spirit solely for industrial purposes in the great battle of keeping down costs.

    While fully agreeing with all that the right hon. Member for Blyth (Mr. Robens) has just said, it seems very strange when I recall that about a year ago he and his colleagues strongly resisted identical arguments which we put forward from that side of the Committee. It once again emphasises the fact that it is very necessary for any Government to appreciate the difficulties that this extra duty is placing on manufacturers for whom white spirit is in most instances the principal commodity that they use.

    In my own constituency of North Croydon we have the largest dry cleaners in the whole of the county of Surrey. They have been subjected, as have other industries, to the very heavy burden of this increased duty, which once again we are placing on their shoulders. I think everyone will agree that dry cleaning is an essential industry in modern times. This further taxation is really laying a most unfair burden upon it.

    I submit that the Petrol Duty was originally intended as a tax on fuel used in the ordinary combustion engine, and most Governments still talk about it in those terms. Therefore, it seems a greater injustice to industry that this principal commodity that the chemical and paint industries use should be yearly subjected to further increases in duty. In the last two Budgets these industries have been subject to an extra 4½d. and 7½d. a gallon on white spirit, which is indeed a very heavy burden on their manufacturing costs.

    The dry-cleaning industry has been very fair indeed with the public in trying to stabilise their charges. It was not until a short time ago that, after a long period of time, they were compelled to raise their charges in sheer desperation. We are reaching a stage where it is very difficult indeed for industries to pass on these extra charges. Therefore, I sincerely hope the Government may consider the situation and recognise that it can be met. After all, white spirit was free of coupons in the days of petrol rationing, so it cannot be very difficult administratively to separate it now from the oils which are subject to this additional duty.

    I feel that that could be achieved, and I hope the Government will recognise that it is grossly unfair to add to this burden yearly when it could never have been originally intended that Petrol Duty should mean an extra cost to one of the principal commodities used by an industry.

    I support this Amendment and I hope that in view of the support it has received already from the other side of the Committee, and no doubt the further support it will receive from other hon. Members on the Government benches, the Minister of State for Economic Affairs will be able to accept it.

    It is really monstrous that this further increase in the Petrol Duty should be applied to oil used for industrial purposes and in manufacture as distinct from use in locomotion. Is there any reason for it other than the excuse that there will be administrative difficulties in making the concession for which the Amendment asks? If, as I apprehend, that is the only reason, could there be any better authority of how to deal with administrative difficulties than the Minister of Fuel and Power himself? He had a good deal to say on this subject in the debate on the Finance Bill last year.

    It will be remembered that when this matter came up last year my right hon. Friend the Member for Battersea, North (Mr. Jay) made a considerable concession on this subject and moved a new Clause, which is now Section 10 of the Finance Act, 1951, designed to go some way to meet criticisms that had been made on this subject. But what did the present Minister of Fuel and Power then say about administrative difficulties?

    He pointed out, on 28th June, 1951, in c. 1591 and 1592 of the OFFICIAL REPORT that practically every other industrial country in the world including, for example, the United States, Australia, South Africa, Eire, Holland, Denmark, Norway and various other countries had found no administrative difficulty whatever in exempting from the application of an increased petrol tax those who used white spirit and other hydrocarbon oils for manufacturing purposes. He pointed out with what seemed to me to be unanswerable logic that if those other countries were able to overcome administrative difficulties we should be able to do likewise.

    He went on to say quite rightly that we had a very high standard of administration in these matters, but that the other countries mentioned were also well-conducted, and capable of a fair and equitable administration of rebate. It surely ought not to be beyond the wit of our efficient Civil Service to administer a system designed to exempt industrial users of these spirits for manufacturing purposes from the increasingly high burden of a tax which is designed primarily to collect revenue from those who use motor spirit for locomotive purposes.

    Are we going to hear tonight from the Financial Secretary that it is these administrative difficulties which prevent him from accepting this Amendment? Is it merely the fear that there will be some abuse if this Amendment is accepted? Have the party opposite such a poor regard for the honesty and integrity of private enterprise industrialists that they think there will be great abuse if this concession is granted? No doubt, there will always be some attempt at evasion, as there must always be, but do they really say that it is beyond their capacity to devise an efficient system which will ensure that only those who have a legitimate claim to exemption will be granted exemption?

    The Minister will be well aware that all kinds of safeguards can be applied by the Customs and Excise to prevent abuse. The safeguards which can be adopted are well known. Nobody would be entitled to claim exemption from duty unless proper certificates were given, duly supported if necessary by the company's accountants and auditors. There would be appropriate penalties for making improper statements. There would be opportunities for the Government to have access to the books of records of any companies claiming exemption from the duty under the proviso proposed by this Amendment. There would be all the paraphernalia which is now open to the Government to ensure that that rebate was only granted in cases where it might legitimately be claimed.

    I hope we shall not hear this evening that it is these administrative difficulties which prevent the Government from giving recognition to this claim for exemption which is practically the universal demand of all manufacturers using these light hydrocarbon oils—not only the dyers and cleaners, to whom reference has been made, but the paint manufacturers, the linoleum manufacturers and those who use light hydrocarbon oils for all kinds of rubber gloves and goods.

    10.15 p.m.

    If the Minister should feel that he cannot do anything until the administrative machinery has been worked out which would enable him to grant the concession for which this Amendments asks, might I ask him what his Department is doing about the Section that was introduced last year at the request of the Opposition—the present Government—in order to meet the case of those manufacturers who use these light hydrocarbon oils as ingredients in various articles which are used for export? It will be remembered that the Section which was introduced by my right hon. Friend last year—Section 10—was expressly designed to ensure that at any rate throughout the whole range of the export trade persons using these light hydrocarbon oils as ingredients in goods for export should be enabled to obtain a drawback.

    What use is the Minister making of that Section? It was contemplated that there would be a series of inquiries dealing with each trade, to enable them to get the benefit of the Section. My information is that no order has yet been made under the provisions of that Section. If that is so, I should like to ask why not? When will the first order be made, when will the second order be made and when will a whole series of orders be made? It is now the responsibility of the Minister to ensure that full advantage is taken of the provisions of that Section.

    Surely it was not contemplated that we should have to wait a whole year before the Treasury came forward to implement the concessions which my party introduced last year? Surely it was not contemplated that these trades should be dealt with one at a time? Surely discussion could go on simultaneously with all the trades which were expected to derive benefit from drawback? I hope that the Minister will be good enough to give us some further information on that subject.

    I do not limit my support of this Amendment to that narrow ground. I base it on the much wider ground that this is a concession which ought to be made and which ought not to be refused purely on the argument of administrative difficulties. If there are administrative difficulties they ought to be overcome and, as the Minister is well aware, all kinds of suggestions have been made by the industries affected to indicate how those administrative difficulties can be overcome and the various safeguards can be introduced in order to prevent any evasion if this Amendment is made.

    I should like to refer to the Amendment standing in the name of my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) and myself, dealing with aviation spirit supplied for use in aircraft or used in connection with the construction or testing of any engine. This evening the Financial Secretary has made a concession in respect of the flying clubs of Britain. I have never seen the reason for a tax on aviation spirits used by the airlines.

    The two national Corporations—B.O.A.C. and B.E.A.C.—have for a number of years had deficits, and we have been giving money to the Corporations with one hand and taking it away with the other. It is the taxpayers' money, and there is a lot of accountancy and other work involved. Fortunately, B.O.A.C. is now out of the red, but B.E.A.C. is not yet in that happy position.

    Apart from the two Corporations, the independent operators are still fighting hard to make a living, and I suspect that many of them are having considerable losses. I wonder whether it is generally realised that, on the internal air services in this country, the first five passengers boarding an aeroplane pay their fares not to the operator but to the Chancellor of the Exchequer—that is, the first five passengers on small aircraft flying in this country. It will be very difficult to build up the merchant fleet of the air if, perhaps, 25 per cent. of the passengers are paying their full fare to the Chancellor of the Exchequer.

    The previous Chancellor of the Exchequer said that he could not discriminate in favour of one form of transport, but I do not think that my right hon. Friend, nor, certainly, the former Chancellor of the Exchequer, realise the position, because in air transport the consumption of fuel and its cost provide a problem which is quite different from that in the case of road vehicles.

    I ask the Minister of State to bear in mind that in the air we are in a transitional stage; we are moving from pistonengined aircraft to jet engines and, as is known, jet engines use kerosene, which does not bear this tax. Within perhaps three or four years, 80 per cent. of the airliners in this country will consume kerosene. What is going to happen then? Are we to have another tax imposed on the jet airliners—a form of propulsion in which Britain is leading, building Comets for other countries and creating a great export trade? It does not make sense at all. I would refer, quite briefly, to the testing of aircraft and engines. About 60 per cent. of the aviation petrol consumed in this country is consumed in bench testing. I believe that figure has increased in the last 12 months. In 1950 the figure was 52,000 tons.

    We have in this country a very great aero-engineering industry, with highly-skilled designers and craftsmen, who last year exported about £43 million worth of equipment, not in aircraft but mainly in spare parts. I believe that if they are encouraged in the right direction our exports in the next few years may reach £150 million or £200 million a year, which means that for years afterwards we shall sell large quantities of spares both for the aeroplanes and for the engines. Through this great engineering industry we may well make up what we lose on textiles and other industries.

    I ask the Minister of State not to treat the matter lightly. It is important for the future economic position of the country. The sum of money involved is not great. At the moment it costs British European Airways £103,000 a year, and I am told that it costs independent operators £40,000 a year. It costs B.O.A.C. very little, because 99 per cent. of their flying is done out of Britain and they are exempt from tax for such flying. They pay tax on aviation fuel when flying from London to Prestwick en route to Canada and the United States, or perhaps in flying from Heathrow to Bristol.

    I ask the Minister of State to give this matter his favourable consideration because, by so doing, he will be rendering a service to this great industry, which has such brilliant prospects.

    For successive years I have sought the remission of the tax on light hydrocarbon oils in so far as they affect the paint industry, and each time that I have criticised my own Front Bench, when they were on the other side of the House, I received great cheers and enthusiastic support from hon. Members opposite, including the present Front Bench, in my criticism of the then Chancellor of the Exchequer. Tonight, if they were, over the successive years, honest in their enthusiasm and their cheers, and if these Amendments were to go to a Division, one would naturally expect them to be in the Lobby supporting the Amendments and their cheers of the past.

    Again we shall find a promise made broken. We are getting quite used to that now, and I think that the people of the country are, too. However, tonight the Financial Secretary or the Minister of State for Economic Affairs has an opportunity of making a concession that will build up goodwill and morale in an industry which stands second to none in this country so far as good relationships go.

    This appeal is being made tonight for both the trade union and the employers' sides of the industry. We have a National Joint Council on which we discuss the whole of the problems of our industry, and if one side or the other has any difficulty, there is no hesitation in calling the two sides together to put the whole of the difficulty on the table for a commonsense solution.

    This appeal is being made to the Treasury to give some relief to this industry, which is one of the industries in which the labour cost is the lowest of all the industry's costs, and in which the cost of raw materials is the highest cost. This industry manufactures roughly 35 million gallons of paint per year. Paint that is directly exported in bulk carries a remission of duty for bulk export; but the major portion of the paint exported is not exported in bulk, but is exported on some other commodity such as motor cars, engineering products—indeed, every type of goods the export of which we are being asked from both sides of the Committee to build up. Tonight the Treasury has an opportunity of showing goodwill and of making an attempt to reduce the costs of a primary, basic commodity.

    Tomorrow there will be a meeting of the Joint Council of the paint industry, and tomorrow, in all probability, I think, notice will be given of a demand for an increase in wages in the paint industry to meet the rising cost of living. Here is an opportunity for the Chancellor or the Minister of State for Economic Affairs or the Financial Secretary to show some measure of goodwill to the industry that will probably have far-reaching effects tomorrow on the arguments that will be put forward. It could be a genuine effort on the part of the Treasury to lower the costs of production.

    We have been told to produce more, work harder, use new types of machines, and do all manner of things in mass production to bring down costs. An opportunity is here tonight for the giving of some assistance by the Treasury in that direction. It may be said that administrative difficulties stand in the way, but already the paint industry has submitted to the Treasury a scheme to avoid abuse and to help the administration of any scheme of rebate on light hydrocarbon oils used in the manufacture of paint.

    10.30 p.m.

    Other countries have administrative difficulties greater than ours. In America the administrative machine is not nearly as simple as ours, yet they have found ways of rebate for light hydrocarbon oils in industry. They have found means in Canada. They have found means in two countries that are just rebuilding their economic systems, Germany and Italy. Germany especially will become a competitor of ours on the world markets, and relief has already been given in the taxation of light hydrocarbon oils used in industry.

    In other countries such as Australia and South Africa tax differentials have been granted in this direction. Since the war Belgium, The Netherlands, Luxembourg, Norway and Finland have given tax rebates on the use of light hydrocarbon oils in industry. So surely it is just a commonsense argument that we in this great country, with our great possibilities, should have a Government that will give every possible help to industry and to production for export, because it is only by exporting that we can live. Tonight is the opportunity. Tonight we can have some aid given to industry which will really help it.

    Ever since the original duty of 4d. a gallon was levied on light hydrocarbon oils it has not been understood. It was not meant at that time that this tax should become a burden on industry generally. It was a road tax at the beginning. Yet today we have the unhappy position that while Purchase Tax on luxury articles is 100 per cent., the tax on light hydrocarbon oils used in paint manufacture is 175 per cent. on the wholesale price. Purchase Tax is 100 per cent. on luxury fur coats and the like, but a commodity which is essential to all industry, paint, bears a tax of 175 per cent. on the basic material that goes into it.

    That is wrong. That is ridiculous. One could call it outrageous because in itself it is a demonstration that industry is not receiving very much help. I repeat: tonight presents an opportunity. We may be told that with a production of 35 million gallons per year the reduction of 1s. per gallon suggested in my Amendment would mean £1¾ million per annum rebate in tax. But already there is a rebate on bulk exports, so it ought to be something less than that figure. But even £1¾ million would be a welcome rebate to the industry, and it would be an encouragement to the country for increased production at a lower cost.

    It may be argued that we cannot afford it. But if the trade union at the meeting tomorrow serves notice for an increase in wages of a substantial character, and press for that increase, and—I repeat what I said a short while ago in the House—they will not take "No" for an answer, it will cost more than that overall per annum.

    We have given support in the trade union world to various Ministers, including the Chancellor in his appeal. We have had inside conferences and heart to heart talks to examine our difficulties, and, indeed, when the Chancellor was making his Budget speech, standing behind the Chair when he was talking of trades unions and their counsels I could feel a halo forming round my head so kind were his words and so lavish his opinion of trade union leaders.

    Here he has an opportunity to do something or to advise the Minister for Economic Affairs to do something—

    I should like to ask one question that has reference to the meeting tomorrow. What is the connection between the hon. and gallant Gentleman's Amendment and the trade union meeting that is to take place tomorrow?

    The meeting tomorrow is not a trade union meeting. It is a meeting of the Joint Council which embraces both sides of the industry, and consideration is to be given to the question of whether or not there should be an application for an increase in wages.

    This pernicious tax and any wage increase would mean that the price of raw materials and the costs of labour would rise, so that the finished product would also rise in cost. A substantial wage increase would mean that there would be a considerable increase in the cost of the finished product. Rising costs of labour and materials are making the position well nigh impossible for our manufacturers, who are also forced to face increasing competition from countries like Germany, whose firms get rebates to keep the cost of the product down.

    A token effort can be made by the acceptance of this Amendment. The right hon. Gentleman has already had a conference suggesting that there should be some form of wage standstill, or if not that a toning down of wage demands. The right hon. Gentleman is still waiting for a reply to that. The right hon. Gentleman can give an example by a display of willingness on the part of the Treasury to assist this industry, but if no help is forthcoming—

    I should like help from the hon. and gallant Gentleman to follow his argument. Is he claiming that if the Chancellor gives way on this Amendment then there will be no wage claim tomorrow?