Basic Petrol Ration

Part of Orders of the Day — King's Speech – in the House of Commons at 12:00 am on 29 October 1947.

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Photo of Mr Hugh Gaitskell Mr Hugh Gaitskell , Leeds South 12:00, 29 October 1947

The decision to abolish the basic petrol was, of course, taken as an essential step in the battle of the balance of payments. [Interruption.] Military metaphors are sometimes appropriate in dangerous situations. The purpose of the decision was, of course, to save foreign currencies in general and dollars in particular. On this I think there is no disagreement. Obviously, it is not necessary to argue about whether or not the abolition of the basic ration would save foreign currency, because we have to import virtually all the oil we use and any reduction in imports is bound to save some foreign currency. But it is sometimes supposed that if oil comes from the sterling area, we do not have to pay for it at all. I will deal in full in a moment with just how much does come from the sterling area, but I do want to point out that, even if it did, or could all come from the sterling area, it would still involve us in having to find some means of paying for it. That has not always been clearly understood.

The chief cause for the Government's decision undoubtedly rests on the necessity for saving dollars. How much will we save? Here are our estimates. We estimate that the abolition of the basic ration will save gross about 960,000 tons of petrol in 1948. We estimated that we shall have to issue additional supplementary allowances to the extent of 160,000 tons, and, therefore, that the net saving will be 800,000 tons.