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Petrol Companies (Emergency Surcharge)

Oral Answers to Questions — Ministry of Power – in the House of Commons at 12:00 am on 15th April 1957.

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Photo of Mr Ernest Davies Mr Ernest Davies , Enfield East 12:00 am, 15th April 1957

asked the Paymaster-General what consultations he has had with the oil companies regarding reduction of the emergency surcharge, following the removal of the temporary extra 1s. tax; and with what result.

Photo of Mr Arthur Lewis Mr Arthur Lewis , West Ham North

asked the Paymaster-General for how long he intends to allow petrol companies to keep the Suez surcharge on petrol prices, after the ending of the additional 1s. tax and derationing.

Photo of Mr David Renton Mr David Renton , Huntingdonshire

The hon. Members will have noted the reduction of 1d. per gallon in the surcharge, which was announced by the companies last Thursday after consultation with my noble Friend. The position will be kept under review, and the remainder of the surcharge will be removed as soon as circumstances permit.

Photo of Mr Ernest Davies Mr Ernest Davies , Enfield East

Yes, but while welcoming the removal of the 1d., may 1 ask whether it is not a fact that, ¾d. was for the extra cost to the oil companies of distribution and 1½d. was to assist retailers in view of the fall in the through-put? Is it not a fact that supplies are pretty close to normal? Certainly consumption appears to be normal judging by the number of vehicles on the roads. Does the hon. and learned Gentleman consider there is any justification for continuing this surcharge, at any rate that part of it to which I have referred?

Photo of Mr David Renton Mr David Renton , Huntingdonshire

I cannot accept what the hon. Gentleman has said. The details of the surcharge are not exactly as he has stated. The surcharge was intended to account for the conditions which arose through tankers having to be diverted round the Cape and the disturbance in production from the refineries which also occurred. As soon as normal circumstances are restored, the surcharge will be brought to an end.

Photo of Mr Arthur Lewis Mr Arthur Lewis , West Ham North

Yes, but can the hon. and learned Gentleman explain why it was he agreed to this surcharge when at least one company issued a report last week announcing it has made a million pounds more profit on top of many millions, and that it paid an 18·66 per cent. tax-free dividend? Why did he agree to give any surcharge at all? Why should not the companies pay it out of their profits and thus get the cost of living down? Can he answer that?

Photo of Mr David Renton Mr David Renton , Huntingdonshire

If the hon. Gentleman will look into the matter a bit farther, I do not think he will find that the suggestion he is making is well founded.

Photo of Mr David Renton Mr David Renton , Huntingdonshire

Indeed, no. The question of the profits during the whole of the year 1956 has not very much to do with the surcharge— — [HON. MEMBERS: "Oh."]— which applied only in the last few weeks of 1956 and the first few months of 1957.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

Would not my hon. and learned Friend agree that the major part of this surcharge is to be attributed to the cause which he gave, bringing the oil round the Cape? In order to put a stop to much of this pernicious propaganda from hon. Members opposite— [HON. MEMBERS: "Oh."]— will he tell the House that it is the major part of the increased cost and how much it amounts to— that is, for bringing the oil round the Cape?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

How does the Parliamentary Secretary explain the fact that while his Department has been approving this increase in price, Royal Dutch-Shell profits and dividends have risen to record levels? Its shares now stand at record levels. Is the hon. and learned Gentleman aware that in many people's opinion the oil companies are making rings round him and his Department?

Photo of Mr David Renton Mr David Renton , Huntingdonshire

The company which has been mentioned is one which has international connections far exceeding its activities in this country. It is surely familiar to the House by now that it is rightly part of its policy to build up for future expansion.

Hon. Members:

Oh.

Photo of Mr Ernest Davies Mr Ernest Davies , Enfield East

In view of the most unsatisfactory reply, I beg to give notice that I shall raise this matter on the Adjournment.