Orders of the Day — Finance Bill

– in the House of Commons at 12:00 am on 10th June 1964.

Alert me about debates like this

Again considered in Committee.

[Mr. GEORGE THOMAS in the Chair]

Question again proposed, That the Clause be read a Second time.

6.18 p.m.

Photo of Mr Archibald Manuel Mr Archibald Manuel , Central Ayrshire

When we were interrupted because of a message from another place, I was referring to the hardships experienced by some elderly people because of rail closures and the need to use bus services in the rural areas. There no longer exists a choice of transport when weather is bad or when a rail journey would be more convenient.

We must remember that in many rural areas the buses run infrequently and the vehicles used may not be of a suitable standard. The imposition of this heavy fuel tax means that small bus operators in the rural areas have to charge higher fares. This is an on-cost on low wage earners and will be used as a reason for asking for an increase in wages during the wage negotiations which take place between trade unions and employing bodies.

British Railways subsidise many bus services which run at a loss and require to be subsidised. Surely the Government should take a much broader view of the whole economic situation and calculate the cost of the subsidy needed to keep the buses running. Other forms of transport such as the MacBrayne steamer service, which operates on the West Coast of Scotland, receive a large Government subsidy, and the Government would be easing themselves of a proportion of this burden if the duty were abolished. Perhaps the Economic Secretary can tell the Committee whether there are figures available indicating the Government subsidy to transport services.

In many areas buses, which have to be used because the rail services have been closed, are not suitable vehicles. Mothers who have to take their children in perambulators cannot travel on these buses. People going on holiday, who have to take a bus to a point where they can board a train, find that there is not proper accommodation on the bus for their heavy luggage. Does not the Economic Secretary think that bus companies, especially the smaller operators, should have the help which would result from relief from this tax so that they may be able to provide more suitable vehicles to cope with the conditions which have arisen because of rail closures?

I hope that the Economic Secretary will be forthcoming in his reply and that we shall not be told, as we were last year, that the Government admit that we have a case but that because of some aspect of their fuel policy in relation to coal this case cannot be considered. The problem should be given proper consideration this year because the people in the rural areas deserve the utmost consideration from this Government. Their loyalty to the Conservative Party has been severely strained and they deserve some return. The Economic Secretary should give some indication that this iniquitous tax will be removed.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

We have had an interesting debate on fuel and transport policy from the general point of view and, to some extent, from a constituency viewpoint. These proposed Clauses may be divided in their intention into three categories. Clause No. 38 and Clause No. 19 deal with the heavy oil duty of 2d. a gallon which was imposed in the 1961 Budget. One proposes that the duty should be abolished and the other that it should be halved. Clause No. 36 would exempt from the duty dual-purpose engines when they are not used for propulsion and Clause No. 9 would enable buses to use tax-free fuel.

I hope that the hon. Member for Bradford, East (Mr. McLeavy), whose great expertise in these matters we all recognise, will not think it discourteous if I deal first with the other Clauses, because I think that it may be convenient for the Committee if I deal separately with the question of the heavy oil duty and with the specialised points raised by my hon. Friend the Member for Ilford, North (Mr. Iremonger) and then, last, with Clause No. 9 to which the greater part of the debate has been devoted.

I think that I should correct a misapprehension of the hon. and learned Member for Montgomery (Mr. Hooson) that the heavy oil duty has something to do with buses. It is true that although the heavy oil duty was introduced originally as a revenue duty it is being continued as an element of protection for the coal industry. The total yield from this duty in this year will be about £67½ million.

My hon. Friend the Member for Willes den, East (Mr. Skeet) suggested that it was easier to halve this duty this year than it would have been last year. In some ways I am delighted that my hon. Friend has recovered from his attack of laryngitis but in other ways I am glad that he has not fully recovered. He said that the National Coal Board did not need protection because it was not weak. I admit that with great pleasure. We all know the magnificent job which Lord Robens has done. The Coal Board does need protection, not because it is weak but because at this stage it is still necessary to afford it protection in order to achieve a balanced fuel policy. The protection is necessary not only because of the present position but because of the future position of the National Coal Board. My hon. Friends made great play with Lord Robens's statement. But the time when an industry may reach the stage where it does not need further protection is not necessarily the time at which such protection should be withdrawn.

6.30 p.m.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Willesden East

I appreciate the point that a certain amount of protection may be required, but is my hon. Friend prepared to state to the Committee when he feels that this protection should be withdrawn? Will that be in two years, three years, four years, or in an unlimited time?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

I welcome the confidence—which I share—of my hon. Friend that it will be the present Chancellor who makes this decision, but I very much regret that I cannot commit him in advance to doing so. The Chancellor announced in his Budget Statement last year that the decisive consideration leading to his decision not to reduce the heavy oil duty was the long-term competitive power of the coal industry. I think that the concessions on the price of coking coal which the National Coal Board feels able to make should not give my hon. Friend the Member for Willesden, East any reason for pessimism. I suggest, however, that a year in which the Chancellor is raising extra taxation is not a year in which a duty of this nature can be easily removed, such as last year when the Chancellor was able to make a tax concession.

There is a point I wish to refer to now and to return to later. My hon. Friend made an appeal that our fiscal policy should keep in line with technological advance. Part of his appeal was that we should transfer as a burden to the taxpayer the cost of protecting the coal industry from other industries which now bear it. But I think other parts of the Finance Bill, particularly the concession on light oil, are at least a sign that we are very much aware of the fiscal implications of technological development. I must therefore tell my hon. Friend and the Member for Bolton, West (Mr. Holt) that we do not feel able to accept this new Clause this afternoon.

In linking his remarks on the new Clause with the road fuel tax, the hon. Member for Bolton, West almost made a part of my argument for me. He implied that all these duties should be reconsidered. That again is something which I do not feel reasonable to expect from the Chancellor in a year in which he is seeking extra taxation. The hon. Member quoted some figures and asked me for confirmation of them. The burden of the fuel oil duty on manufacturing industry at the moment is £32 million, on electricity generation it is £11½ million, and on the rest—railways, agriculture, commercial and industrial heating, domestic heating and the usual miscellaneous items—it is £24 million.

So on manufacturing industry the direct burden as it concerns exports is not so great as may seem at first sight. I also remind the hon. Member that some of the difficulties in regard to exports for cement manufacturers are caused by the successes of their subsidiaries manufacturing within the European market. While we all welcome those successes, we must recognise that they make it to some extent harder for their parent companies to compete abroad.

I have only one further point to make in rejecting this Clause. That is about the cost of heavy oil and industrial costs compared with those overseas. There is evidence that the present level of selling prices of heavy oil in the United Kingdom is comparable with equivalent levels in Europe. Of course, it is also true that the element of extra cost represented by the duty applies to the difficulties which have been quoted by my hon. Friend the Member for Willesden, East and the hon. Member for Bolton, West, but these points can be made about any specific item of cost which one might like to select.

I turn to the somewhat more specialised appeal of my hon. Friend the Member for Ilford, North. He knows that we have studied this problem with a great deal of care and a certain amount of sympathy simply for the reason that there is a real and genuine difficulty in enabling the tax system both to be fair as between taxpayers, and also conducive to increased technical efficiency.

I say to my hon. Friend the Member for Holborn and St. Paneras, South (Mr. G. Johnson Smith) that there is a genuine conflict of interest between reduction in costs and trying to maintain equity between taxpayers. I cannot agree with him that any distortion of the tax system is justifiable provided it reduces costs. This tax is not in fact an anomaly. What hon. Members have asked is that we should create an anomaly within the tax system for the benefit of a particular class of vehicle. That may not always be something on which we should turn our backs, but in this case it would be a change of principle. We are being asked to create a new class for tax purposes of hybrid vehicles which sometimes use un-rebated fuel and sometimes use rebated fuel on the road.

The present distinctions are quite clear and easy to enforce and to police. They are easy for industry and users as a whole to recognise. They are that vehicles licensed for the roads use un-rebated fuel. Some vehicles have exceptions made for them. They are largely those concerned with road construction and certain agricultural vehicles, which are using rebated fuel at all times. We are being asked to create a third class of special vehicles which sometimes will use rebated fuel and sometimes unrebated fuel. One hon. Member suggested how difficult this might be in connection with traffic jams on the road as even engines designed to drive vehicles along the road operate for long periods while stationary.

It is not only for administrative convenience that I must refuse the new Clause, but to prevent erosion of the duty and for the perfectly genuine reason of the difficulty of drawing a distinction in favour of a category of dual-purpose vehicles using unrebated and rebated fuel in the same engine. Then the difficulty becomes even greater.

Fairground operators are in a totally different class. They are not allowed to use rebated fuel carried in a tank on the vehicle. They have to provide a separate tank which is brought to the site separately from the vehicle used on the road. Secondly, they have to immobilise the vehicle by what we might call semi-dismantling the connection between the engine and the wheels before they are allowed to use rebated fuel.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

I am sure the hon. Gentleman wants to be fair to the ready-mixed concrete industry, to which the Treasury has previously given concessions. People in that industry are not asking for a special class of vehicle to be taxed but they say that on their vehicles there are two kinds of use of the engine, one to propel the vehicle and one to act, as it were, as a factory operating while it goes along the road. They have proved that these two things can be separated. All they are asking is that the fuel which is not used for propulsion should be rebated fuel. That seems fair and would not create an anomaly.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

I am inclined to agree that the industry is asking that concrete mixers should be allowed to use the engine that drives the vehicles along the road for driving the concrete mixer when stationary and, for that purpose, to use rebated fuel in a separate tank, though using the same engine. The difficulty is that the industry is asking in effect that a new class of vehicle be created. Those in the industry are concerned, quite rightly, only with having one vehicle in that class—concrete mixers—but, unfortunately, the Customs and Excise, and the Government generally, cannot in equity discriminate in the tax system between concrete mixers and other vehicles that can operate in the same way.

There are technical difficulties. I accept that, provided that the device is not tampered with with equal ingenuity as its invention undoubtedly required, the device now perfected does prevent the vehicle from being driven along the road on rebated fuel, but it is dependent on the method of driving the concrete mixer being static and hydraulically controlled. I do not think that we could limit the concession to those using that method. That would be hard on users of other types of drive, certainly vehicles that had a powered cable, and it would be hard to resist, in honesty, those with vehicles that could drive along the road and use their engines for rebated purposes, so to speak, when stationary for a power take-off, and yet allow it for vehicles that used their engines on top of themselves. It is, therefore valid to argue that it would be difficult to police if applied to all those who could claim any equal justification with concrete mixers

However, this is one of the problems that are constantly exercising Her Majesty's Customs and Excise. They arise, too, though I would be out of order to do more than quote an example now, over Purchase Tax. An example is a method of heating a room which, if built in, is tax-free as part of the house, but which, if used in some of the new techniques of prefabrication becomes an appliance or apparatus, and subject to Purchase Tax

It is a difficult and real problem to make sure that the later and more highly developed methods of building, or of mixing concrete, or anything else are not penalised by the tax system. It is a problem of which the Customs and Excise is very well aware, and which it is constantly studying. Again, I would quote as evidence, if evidence be needed, the fact that it is a purely technological consideration that has led us to give a concession on light fuel oil for certain types of furnace. It is clear that, as time goes on, matters of this sort will have to be constantly in our minds.

I turn to the last of this group of new Clauses, and I am sure the Committee will accept that, like the ecclesiastical profession, we have taken the matter in reverse order of importance. I must be blunt to be fair, and say that, as many have surmised, it is no part of my case to accept this new Clause, but I say at once that it is no part of my argument to say that the bus industry does not have special problems. The Government accept, and have accepted in repeated public utterances that it has.

My difficulty here is that we have really had a debate on transport policy. It has been suggested that I should answer in terms not merely within the narrow confine of this new Clause, but my difficulty is that the very arguments that have been put forward that this is part of a wider transport policy consideration are the reasons why I feel that I must refuse to accept this Clause. It deals only in a partial way with what everyone admits is a much wider problem.

The hon. Member for Bristol, South-East (Mr. Benn) dealt with this point but, if I have taken his argument correctly, it was basically that whatever else will have to be done in regard to the problems of public transport in the future, and problems of congestion in our towns, and difficulties of rural transportation, it will have to include the removal of the tax on bus fuel. To that extent, the hon. Gentleman seemed to anticipate my argument, but I will later try to answer that point, as well as other points.

6.45 p.m.

Photo of Mr Edward Mallalieu Mr Edward Mallalieu , Brigg

Would not the Economic Secretary agree that that is precisely what the Government are doing—treating the whole transport system in a piecemeal manner? Is not that just what Dr. Beeching is doing?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

If the hon. and learned Gentleman had been present earlier this afternoon, and had listened to the statement of my right hon. Friend the Minister of Transport, he would know that this is not at all the case.

Photo of Mr Tony Benn Mr Tony Benn , Bristol South East

I do not wish to make too much point of the fact that no Ministry of Transport representative is present, but the hon. Gentleman himself recognises that this is a central part of transport planning. Does the Ministry of Transport agree that this tax, which limits the operations of bus companies, is right?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

That matter does not arise, but if the hon. Member will let me develop my argument I will do my best to answer him.

I do not try to argue that the bus industry does not have special problems, but I do argue that it has not yet been established that financial assistance from the Exchequer—particularly by way of relief from duty—is the right answer. It has been suggested that a direct subsidy is the answer to the industry's problems, but even among the expert committees, many of which have been referred to, there has been disagreement on that subject.

The hon. Member for Swansea, East (Mr. McBride) said that this amounted to a 300 per cent. duty, and another hon. Member referred to it as representing 20 per cent. on running costs. With respect, those are slightly tendentious figures. The hon. Member for Bradford, East quoted a figure of 3½d. to 5d. per vehicle mile. Our figure, in absolute terms, is more likely to be between 3d. and 3½d. per vehicle mile. I do not pretend to the hon. Gentleman's expertise, but at least we do overlap in the middle. The duty represents only one-quarter of a point in the retail price index.

Another hon. Member said that the railways are exempt, but this tax deals exclusively with road transport, and it is not fair to quote this, as, I think, the hon. and learned Member for Montgomery did, as a special exemption from duty. It really is not that. It is a duty that applies to all road transport, and the new Clause seeks special treatment for the bus industry on the ground that it needs some sort of subsidy.

Photo of Mr Frank McLeavy Mr Frank McLeavy , Bradford East

I should not like the hon. Gentleman to misrepresent the purpose of the industry. We are not asking for a subsidy but for the removal of a tax which should never have been imposed. To suggest that we are asking for a subsidy is to misrepresent the position.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

We may be arguing about a form of words but I would have said that if a tax which applied to all vehicles using the roads is removed from one class of vehicle it amounts at least to a subsidy for that class.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

The hon. Member may say "No", but it is.

Photo of Mr Tony Benn Mr Tony Benn , Bristol South East

Could the hon. Gentleman deal with this point? The case does not rest on the plea that the bus companies need this in their own interest but that it is Government policy and Ministry of Transport policy to encourage greater use of public transport. It is the national interest that is being put forward here.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

I take the hon. Member's point, which was also mentioned by the hon. Member for Bradford, East. I have said that I accepted that rural transport and crowding in towns were special problems.

This duty on fuel oil makes an important contribution to the Exchequer and I must tell the hon. and learned Member for Montgomery that he, as so often happens with his party, is rather out of date in assuming that the maintenance of the duty as applied to buses is part of the Treasury brief. It was dropped some time ago. The duty is spread widely and evenly over personal consumption as a whole and the fact that the bus companies have to pay duty is no more anomalous than that they have to pay other taxes and contributions towards the total of public expenditure. It is because this duty is readily identifiable that hon. Members have given such emphasis to it, but it would have been equally arguable that buses should be exempted from other taxes, local and national. My argument is that abolition of the duty by itself does not provide the means to tackle this problem.

Once it is conceded that certain undertakings have this inherent right to be excused this form of taxation there could be a large number of almost equally good claims when looked at from the point of transport policy as a whole. To give the industry relief from duty does not deal with the problem where it is most pressing. Relief on this duty would be indiscriminate and it would be bound to go equally to the more specialised services run by the bus companies, because it is impracticable to differentiate between buses being used for different purposes on different days by the same companies.

Photo of Mr Archibald Manuel Mr Archibald Manuel , Central Ayrshire

Is it not correct to say that the duty should be considered, as other taxes are considered, when we remember that it was brought in as a temporary expedient?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

The hon. Member is getting a little confused. This duty has been in existence for a long time.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

It was imposed for the first time in 1935 when the development of the diesel engine began to erode the revenue from the use of the petrol engine. It was not brought in as a temporary measure but to prevent people escaping the petrol duty by converting to diesel engines. It is the reverse side of the argument, which the hon. and learned Member for Montgomery failed to make, that they are now to be treated on equal terms.

A blanket scheme of the nature proposed by hon. Members opposite is unsatisfactory, and although the argument for relief was concerned particularly with the rural bus services it must be applied to all the services. The Government have accepted the problems of the industry and particularly the problem of crowding in towns. They have accepted the Buchanan Report. I again suggest that it is not only the cost but also the inconvenience of buses and of public transport as a whole that is causing difficulties. In towns people use cars because the buses become inconvenient, and then conditions become worse on the buses and they consequently become more inconvenient because of the further excess of cars. The hon. Member for Bristol, South-East put that argument by implication.

This is also a problem which must be tackled at both ends of the scales, as my right hon. Friend the Minister of Transport implied when he accepted the Buchanan Report. I do not altogether agree with all that the hon. Member for Bristol, South-East said about transport policy. Even today the Minister of Transport said that he is studying the problem as a whole. Meanwhile I suggest to the Committee that this partial relief through a rebate of the fuel oil duty is not the way to deal with the problem. The hon. Member for Swansea, East said that this duty was an artificial addition to costs, but that is an argument which can be applied to every tax in the sense that it is imposed rather than being inherent in the nature of the operation itself.

Photo of Mr Neil McBride Mr Neil McBride , Swansea East

Would the hon. Gentleman say that it was not an artificial addition when one considers the way in which this high increased cost factor impinges on the promotion of passenger resistance to further fare increases?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Halifax

All sorts of additional costs, including National Health contributions, are artificial but I would not say that they should be removed from a particular industry for that reason. It is a false analogy to say that an industry which is in difficulties can best be relieved by removing the tax on its fuel, which it shares with every other user of the fuel. It is no more logical than saying that companies which need to be encouraged to export should be excused from paying National Health contributions on behalf of their employees. The proposal made by hon. Gentlemen opposite is to try to assist bus companies as a whole by excusing them from paying one duty, rather than by applying more general methods to the whole transport problem in order to assist them.

7.0 p.m.

In conclusion, I should like to refer to the expertise of the hon. Member for Bradford, East. While we can agree with him that a great deal needs to be done to help transport in general, and while we can agree also with the hon. Member for Bristol, South-East that the affluent society that has been created by 13 years of Tory rule has brought a large number of problems in its train, I suggest that this is not the way to solve one of them.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

I am sure the Committee will feel that as we have now had approximately three hours' debate on this group of Clauses—and a most excellent debate it has been, in which I have been privileged to listen to every word that has been said on both sides of the Committee—we have now reached the time when we might come to a conclusion.

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

Before my hon. Friend leaves that point, will he also deal with the fact that at least one hon. Member has been sitting here the whole afternoon, that he has never left the Chamber and has seen other hon. Members come in, be called, make their speeches, go out again and never come back. Before the Question is put, I at least will try to catch the eye of the Chair.

Photo of Mr Jack Diamond Mr Jack Diamond , Gloucester

I am sure no one intends to cast any aspersions on the way in which the Chair has chosen speaker after speaker. I gathered from one hon. Member opposite that he hoped that a Member who has not appeared in the Chamber at all would catch the eye of the Chairman, and that he has not succeeded in so doing. Beyond that, I am sure that no criticism was intended by my hon. Friend's comments.

I think that I represent the general feeling of the Committee when I say that having regard to the fact that we have spent approximately three hours on one proposed new Clause we would wish to deal with a number of other new Clauses, and that if we go on at the same rate, it will be in the late hours of Friday when we come to the end of today's business. Having regard to those factors, I feel that perhaps I am representing the views of the Committee when I say that we now ought to reach a conclusion on this Clause.

If I speak shortly it is not that we do not regard the Clause as of fundamental importance but merely that the arguments have been put so well by my hon. Friends, particularly on new Clause 9, that all I need do is summarise the points in the shortest possible way. I draw attention to the fact that there has been all-party support for the arguments on this new Clause. These arguments have stemmed from committees which examined the matter, and all the conclusions of the committees have been accepted. I refer shortly to the Buchanan Committee which said that buses in urban areas should be helped, to the Jack Committee which said that buses in rural areas should be helped, and to the Phelps Brown Committee which said that bus drivers have had a very raw deal. The combination of those points is such that we should now help the buses, as we are trying to do under new Clause 9. All the arguments are in favour of so doing. The arguments of safety, maintenance, peak road traffic, common use, 50 per cent. greater efficiency than using private cars—all those arguments are in favour of it.

The Economic Secretary said that we are dealing with the problem in a partial way. He fails to recognise the fundamental importance of helping the transport system on to a sensible road. He fails to realise that what he has said cannot be supported at all. He said that the removal of the duty is not the right answer. We are simply saying—and I hope my hon. Friends and, indeed, those on the other side of the Committee who support us will carry their support into the Division Lobby—that the imposition of the duty, having regard to all these circumstances, must be the wrong answer and we must, therefore, press for this Clause.

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

I thank you, Sir William, for calling me because I thought that probably I could not be seen in this corner of the Chamber. I should hate to think that my shadow had diminished to the extent that I could not be observed. As you will know, Sir William, I was in the Chamber before you vacated the Chair and Mr. Thomas took your place. I have not left the Chamber during the whole of the afternoon. I therefore felt that it was right to make a few comments, particularly in view of the fact that when the hon. Member for Ilford, North (Mr. Iremonger) was on his feet he asked Mr. Thomas to take note of the fact that his hon. Friend the member for Sevenoaks (Mr. J. Rodgers) would hope to catch the Chairman's eye, when the hon. Member for Sevenoaks had never been in the Chamber at all.

The Chairman (Sir William Anstruther Gray):

Order. I think it would be better if the hon. Member were to apply himself to the proposed new Clause that we are now debating.

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

Yes, Sir William. I was going on to deal with new Clauses 9, 36 and 38 which are being taken together in the light of the continued absence of hon. Members opposite. They make speeches here and in the country; they make promises, and then when it comes to implementing those promises they are conspicuous by their absence.

The Economic Secretary has made no reference at all to the fact that one of the things that this fuel tax does is to increase the cost of living. It creates an inflationary spiral, it helps to increase wages and helps to depreciate the standard of living of the lower-paid workers. During yesterday's debate the Treasury Bench shed crocodile tears about old-age pensioners and those on limited incomes, whom, they said, they wanted to help. If these Clauses were accepted, the bus companies would be able to reduce their running costs, and possibly reduce their fares. That obviously would help old-age pensioners who use buses. It might also help the bus companies to institute a conces- sionary fare system for old-age pensioners, which hon. Members opposite have voted against in the House. There is no point in the hon. Member for Gillingham (Mr. Burden) coming into the Chamber for a moment, laughing and sneering at one of my hon. Friends who said that not everyone has got a car. The hon. Member said "Almost everyone has", but, of course, old-age pensioners do not have cars.

By accepting these new Clauses and by attempting at least to implement the promises that they have made over the years, the Government could commence to reduce the cost of living. They could reduce the fuel tax, which would help not only the bus industry but industry as a whole. The cement, brick and building industries have to pay this tax. Local authorities engaged in house building and school building have to pay large sums to building contractors. If those contractors could reduce their prices as a result of the abolition of this fuel tax, the local authorities' charges would be less. They would save money, and that would lead to a reduction in rates. That is another subject about which the Treasury Bench have shed crocodile rears.

Photo of Mr William Taylor Mr William Taylor , Bradford North

On a point of order, Sir William. Is it in order, in the context of this new Clause, to raise the subject of local rates?

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

Further to that point of order, Sir William. I am suggesting that acceptance of these new Clauses would bring about a reduction of the expenditure which local authorities have to meet. Instead of paying the tax, they would be able to save, and, therefore, having more money available, would no longer have to levy such high rates. Surely, even the hon. Member for Bradford, North can follow that. I was explaining that the Treasury Bench and the Tories generally have been shedding crocodile tears about local rates and saying that they would like them to be reduced. Here is a way to do something about it. As a result of the abolition of this fuel duty, local authorities would directly save enormous sums.

One of the reasons why I am speaking is that my own local authority has asked me to put its view to the Com- mittee. It supports these new Clauses because their adoption would mean an enormous saving for local authorities, which, in its turn, would enable them to reduce local rates. This applies in my own local authority area. It can and should apply to that which is temporarily represented by the hon. Member for Bradford, North. I was trying to explain to him that if he and his right hon. Friends would only fulfil the promises and pledges which they have made and which the Tories have made generally, local authorities would be able to bring down their rates and the cost of living would be reduced.

I hope that the hon. Gentleman will listen to what I am saying. Otherwise, he may try to interject again and ask what the relevance of it is. Perhaps he has read in HANSARD or the newspapers that the Chancellor yesterday gave an answer to my hon. Friend the Member for Accrington (Mr. H. Hynd), who had very wisely and properly asked to what extent the Chancellor had implemented his promise to increase the purchasing power of the £. The right hon. Gentleman replied that the £ was worth 20s. in October, 1951, and had depreciated by April, 1964, to 13s. 6d.

Perhaps you are wondering, Sir William, what this has got to do with the new Clause?

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

The hon. Gentleman has spoken the words which were on the tip of my tongue.

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

I was about to explain, Sir William, that if the New Clauses were adopted, with the resulting reduction of industrial costs, there would be a reduction in the cost of living. With a reduction in the cost of living, of course, we should find that the purchasing power of the £ would go up. Instead of being 13s. 6d., it might begin to go back to 13s. 7d. or to 14s.

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

The hon. Gentleman is stretching to the limit what is connected with the new Clauses which we are debating.

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

That would be the last thing I should wish to do, Sir William. I thought that you were about to suggest that I was streching Tory policy to make it appear that the Government really wanted the £ to be worth something. That I should not do. I am quite seriously putting the point that, if these four new Clauses were accepted and the fuel duty were abolished, there would be a great beneficial saving in various ways. According to the Minister's own figures, £32 million is attributable to the passenger bus service, £24 million to manufacturing industry and £11½ million to industry generally. There are some millions of pounds. If that amount could be remitted, those industries with which we are concerned, for instance, cement manufacturing and brick manufacturing, could charge so much less for their products.

7.15 p.m.

It is relevant to point out to the Chancellor that there is here a way of implementing at least one of his promises, that he would reduce the cost of living and make the £ worth something. I should not expect him to put it back to 20s., but I should like to see it start on the way back to something worth having. If he were to make a start on that, he would find that it would help him personally. It might even help to save his own seat, just as it would help to save the Economic Secretary's seat at the next election. When he replied, the Economic Secretary told us what he would do if he were holding the same office later. It is quite certain that his Government will not be there, but it is almost certain that he will not be there personally.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 166, Noes 200.

Division No. 104.]AYES[7.17 p.m.
Abse, LeoBennett, J. (Glasgow, Bridgeton)Chapman, Donald
Ainsley, WilliamBenson, Sir GeorgeCollick, Percy
Allen, Scholefield (Crewe)Blackburn, F.Corbet, Mrs. Freda
Awbery, Stan (Bristol, Central)Blyton, WilliamCraddock, George (Bradford, S.)
Bacon, Miss AliceBoston, T.Crosland, Anthony
Barnett, GuyBowden. Rt. Hn. H. W. (Lelcs, S. W.)Crossman, R. H. S.
Baxter, William (Stirlingshire, W.)Bowen, Roderic (Cardigan)Cullen, Mrs. Alice
Beaney, AlanBradley, TomDalyell, Tam
Bence, CyrilBrockway, A. FennerDavies, G. Elfed (Rhondda, E.)
Benn, Anthony WedgwoodCarmichael, NeilDeer, George
Delargy, HughKenyon, CliffordProbert, Arthur
Dempsey, JamesKey, Rt. Hon. C. W.Pursey, Cmdr. Harry
Diamond, JohnKing, Dr. HoraceRandall, Harry
Dodds, NormanLawson, GeorgeRankin, John
Doig, PeterLee, Frederick (Newton)Redhead, E. C.
Donnelly, DesmondLee, Miss Jennie (Cannock)Rees, Merlyn (Leeds, S.)
Duffy, A. E. P. (Colne Valley)Lever, L. M. (Ardwick)Rhodes, H.
Edelman, MauriceLewis, Arthur (West Ham, N.)Roberts, Albert (Normanton)
Edwards, Rt. Hon. Ness (Caerphilly)Loughlin, CharlesRobertson, John (Paisley)
Edwards, Robert (Bilston)Lubbock, EricRobinson, Kenneth (St. Pancras, N.)
Edwards, Walter (Stepney)Mabon, Dr. J. DicksonRodgers, W T. (Stockton)
Evans, AlbertMcBride, N.Rogers, G. H. R. (Kensington. N.)
Fernyhough, E.MacColl, JamesRoss, William
Finch, HaroldMacDermot, NiallShinwell Rt. Hon. E.
Fitch, AlanMolnnes, JamesShort, Edward
Fletcher, EricMcKay, John (Wallsend)Silkin, John
Foot, Dingle (Ipswich)MacKenzie, J. G.Silverman, Julius (Aston)
Fraser, Thomas (Hamilton)McLeavy, FrankSkeffington, Arthur
Galpern, Sir MyerMacPherson, MalcolmSlater, Mrs. Harriet (Stoke, N.)
Ginsburg, DavidMallalieu, E. L. (Brigg)Slater, Joseph (Sedgefield)
Gordon Walker, Rt. Hon. P. C.Mallalieu, J. P. W. (Huddersfield, E.)Small, William
Gourlay, HarryManuel, ArchieSmith, Ellis (Stoke, S.)
Griffiths, David (Rother Valley)Mapp, CharlesSnow, Julian
Griffiths, Rt. Hon. James (Llanelly)Mason, RoySorensen, R. W,
Grimond, Rt. Hon. J.Meilish, R. J.Spriggs, Leslie
Gunter, RayMillan, BruceStones, William
Hamilton, William (West Fife)Milne, EdwardSymonds, J. B.
Harper, JosephMitchison, G. R.Taylor, Bernard (Mansfield)
Monslow, WalterThomas, Iorwerth (Rhondda, W.)
Henderson, Rt. Hn. Arthur (RwlyRegis)Moody, A. S.Thompson, Dr. Alan (Dunfermline)
Herbison, Miss MargaretMorris, John (Aberavon)Thornton, Ernest
Hilton, A. V.Moyle, ArthurWade, Donald
Holman, PercyMulley, FrederickWainwright, Edwin
Holt, ArthurNoel-Baker, Rt. Hn. Philip (Derby, S.)
Hooson, H. E.Oliver, G. H.Warbey, William
Houghton, DouglasO'Malley, B. K.Weitzman, David
Hoy, James H.Oram, A. E.Wells, William (Walsall, N.)
Hughes, Cledwyn (Anglesey)Oswald, ThomasWhitlock, William
Hynd, John (Attercliffe)Owen, WillWilkins, W. A.
Janner, Sir BarnettPaget, R. T.Willey, Frederick
Jay, Rt. Hon. DouglasPannen, Charles (Leeds, W.)Williams, W. T. (Warrington)
Jeger, GeorgePargiter, G. A.Willis, E. G. (Edinburgh, E.)
Jones, Dan (Burnley)Parker, JohnWoodburn, Rt. Hon. A.
Jones, Elwyn (West Ham, S.)Pavitt, LaurenceWoof, Robert
Jones, J. Idwal (Wrexham)Pearson, Arthur (Pontypridd)
Jones, T. W. (Merioneth)Pentland, NormanTELLERS FOR THE AYES:
Kelley, RichardPrentice, R. E.Mr. Ifor Davies and Mr. Grey.
Agnew, Sir PeterCooke, RobertHarrison, Col. Sir Harwood (Eye)
Allason, JamesCostain, A. P.Harvey, Sir Arthur Vere (Macclesf'd)
Atkins, HumphreyCoulson, MichaelHarvey, John (Walthamstow, E.)
Awdry, Daniel (Chippenham)Critchley, JulianHenderson, John (Cathcart)
Barlow, Sir JohnCunningham, Sir KnoxHiley, Joseph
Barter, JohnDalkeith, Earl ofHill, Mrs. Eveline (Wythenshawe)
Batsford, BrianDance, JamesHirst, Geoffrey
Bell, RonaldDeedes, Rt. Hon. W. F.Hobson, Rt. Hon. Sir John
Berkeley, HumphryDonaldson, Cmdr. C. E. M.Holland, Philip
Bevins, Rt. Hon. ReginaldDoughty, CharlesHollingworth, John
>Biffen, JohnEden, Sir JohnHope, Rt. Hon. Lord John
Bingham, R. M.Elliot, Capt. Walter (Carshalton)Hornby, R. P.
Birch, Rt. Hon. NigelEmmet, Hon. Mrs. EvelynHornsby Smith, Rt. Hon. Dame P.
Bishop, Sir PatrickFarey-Jones, F. W.Howard, John (Southampton, Test)
Black, Sir CyrilFarr, JohnHughes Hallett, Vice-Admiral John
Bourne-Arton, A.Fisher, NigelHughes-Young, Michael
Box, DonaldFletcher-Cooke, CharlesHutchison Michael Clark
Boyd-Carpenter, Rt Hon. JohnFraser, Ian (Plymouth, Sutton)Iremonger, T. L.
Boyle, Rt. Hon. Sir EdwardGammans, LadyIrvine, Bryant Godman (Rye)
Braine, BernardGardner, EdwardJames, David
Brewis, JohnGibson-Watt, DavidJohnson, Erie (Blackley)
Brown, Alan (Tottenham)Giles, Rear-Admiral MorganJohnson Smith, Geoffrey
Browne, Percy (Torrington)Gilmour, Ian (Norfolk, Central)Jones, Rt. Hn. Aubrey (Hall Green)
Bryan, PaulGilmour, Sir John (East Fife)Kerans, Cdr. J. S.
Buck, AntonyGlover, Sir DouglasKerby, Capt. Henry
Bullard, DenysKerr, Sir Hamilton
Bullus, Wing Commander EricGlyn, Dr. Alan (Clapham)Kershaw, Anthony
Burden, F. A.Goodhart, PhlilpKimball, Marcus
Butler, Rt. Hn. R. A. (Saffron Walden)Goodhew, VictorKirk, Peter
Carr, Compton (Barons Court)Gower, RaymondLangford-Holt, Sir John
Chichester-Clark, R.Green, AlanLeavey, J. A.
Clark, Henry (Antrim, N.)Griffiths, Eldon (Bury St. Edmunds)Legge-Bourke, Sir Harry
Clark, William (Nottingham, S.)Hamilton, Michael (Wellingborough)Lewis, Kenneth (Rutland)
Clarke, Brig. Terence (Portsmth, W.)Harris, Frederic (Croydon, N. W.)Lilley, F. J. P.
Cole, NormanHarris, Reader (Heston)Linstead, Sir Hugh
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfied)Osborne, Sir Cyril (Louth)Studholme, Sir Henry
Lloyd, Rt. Hon. Selwyn (Wirral)Page, Graham (Crosby)Summer, Sir Spencer
Longden, GilbertPartridge, E.Tapsell, Peter
Loveys, Walter H.Pearson, Frank (Clitheroe)Taylor, Sir Charles (Eastbourne)
Lucas-Tooth, Sir HughPercival, IanTaylor, Edwin (Bolton, E.)
McAdden, Sir StephenPickthorn, Sir KennethTaylor, Frank (M'ch'st'r, Moss Side)
MacArthur, IanPitt, Dame EdithTaylor, Sir William (Bradford, N.)
Maclay, Rt. Hon. JohnPounder, RaftonTeeling, Sir William
Maclean, SirFitzroy (Bute&N. Ayrs)Powell, Rt. Hon. EnochTemple, John M.
Macleod, Rt. Hn. Iain (Enfield, W.)Price, H. A. (Lewisham, W.)Thatcher, Mrs. Margaret
McMaster, Stanley R.Prior, J. M. L.Thomas, Sir Leslie (Canterbury)
Macmillan, Maurice (Halifax)Prior-Palmer, Brig. Sir OthoThompson, Sir Richard (Croydon, S.)
Maddan, MartinProudfoot, WilfredTurner, Colin
Maginnis, John E.Pym, FrancisTurton, Rt. Hon. R. H.
Maitland, Sir JohnRedmayne, Rt. Hon. Martinvan Straubenzee, W. R.
Markham, Major Sir FrankRees-Davies, W. R. (Isle of Thanet)Vaughan-Morgan, Rt. Hon. Sir John
Marshall, Sir DouglasRenton, Rt. Hon. DavidVickers, Miss Joan
Mathew, Robert (Honlton)Roberts, Sir Peter (Heeley)Walder, David
Matthews, Gordon (Meriden)Roots, WilliamWalker, Peter
Maude, Angus (Stratford-on-Avon)Ropner, Col. Sir LeonardWalker-Smith, Rt. Hon. Sir Derek
Maudling, Rt. Hon. ReginaldSharples, RichardWard, Dame Irene
Mawby, RayShaw, M.Webster, David
Maxwell-Hyslop, R. J.Shepherd, WilliamWells, John (Maidstone)
Maydon, Lt.-Cmdr. S. L. C.Skeet, T. H. H.Whitelaw, William
Mills, StrattonSmith, Dudley (Br'ntf'd & Chiswick)Williams, Paul (Sunderland, S.)
Montgomery, FergusSmyth, Rt. Hon. Brig. Sir JohnWills, Sir Gerald (Bridgwater)
More, Jasper (Ludlow)Soames, Rt. Hon. ChristopherWilson, Geoffrey (Truro)
Morrison, Charlas (Devizes)Spearman, Sir AlexanderWise, A. R.
Mott-Radelyffe, Sir CharlesStainton, KeithWolrige-Gordon, Patrick
Neave, AireyStevens, GeoffreyWorsley, Marcus
Nicholson, Sir GodfreySteward, Harold (Stockport, S.)
Nugent, Rt. Hon. Sir RichardStoddart-Scott, Col. Sir Malcolm
Osborn, John (Hallam)Storey, Sir SamuelTELLERS FOR THE NOES:
Mr. McLaren and Mr. Hugh Rees.