I beg to move, "That the Clause be read a Second time."

The Finance Act of 1933 excluded from the duty on heavy hydrocarbon oils certain vessels engaged in the coastwise trade and certain vessels travelling through the Manchester ship canal. That concession was given to these vessels, because they are engaged in a trade which is subject to foreign competition, and I think that when it was given it was worth about £100,000 a year to the particular companies concerned. We on this side of the House do not oppose such a concession; we think it is necessary. But when this relief from the duty was given it was made perfectly clear that it did not extend to canals and other forms of inland water transport. Last year we had a discussion on this question. I am pleased that the Chancellor of the Exchequer is present to-day, because when I moved a similar proposal 12 months ago it was supported by hon. Members in all parts of the House. There was evidently a desire to accept the new Clause. The Chancellor of the Exchequer was not present and the then Financial Secretary to the Treasury was in something of a dilemma.

Canal transport is one of the oldest and cheapest forms of transport in the country and for a long period has been suffering from severe competition, first from the railways and secondly from the development of road transport. That competition has hit many canal carriers, who, however, have been trying to meet it as best they can. They recognise that they must improve the speed of their barges and have taken away from the canal banks the old horse which we used to see and have put in motor power. The motor power which they find best is a type of engine which uses heavy hydrocarbon oil and, therefore, they are a little concerned with regard to the cost and the way in which it is limiting their activities. The new Clause would only cost about £5,000 a year. I am not arguing it, however, merely on the small cost it would entail, but mainly because of the encouragement it would give to canal carriers still further to improve their barges and inland water transport. At the present time there is a tremendous amount of merchandise going by road which used to be carried by canal boats. In my view, there is still scope for stimulating activity in our canal systems.

The Chancellor of the Exchequer knows as much about inland Water transport as anybody. He was the chairman of the departmental committee which dealt with this kind of transport and made a number of excellent suggestions. He is not ignorant of the difficulties in the way of canal transport, and I hope he will see his way to accept the new Clause. If he cannot, perhaps he will tell us what reply he gave to the letter sent to him by the National Association of Canal Carriers. Last year I quoted a letter sent by them to the right hon. Gentleman, but we failed to elicit from the Financial Secretary what had transpired or the reply that had been made. This year the National Association sent a letter to the Chancellor of the Exchequer on the 25th March in which they made out a most excellent case. They pointed out their difficulties and what they were trying to do; how they were organised and speaking as a national association. They pointed out also that they had an understanding with the railway companies and that they would be able to make still further progress. They asked whether they could submit their views to the Chancellor of the Exchequer for consideration. If the right hon. Gentleman cannot accept the new Clause, I hope he will tell us the objections against it. Last year we were told that those engaged in coastwise traffic were in competition with foreign-owned boats and that canal transport was not in competition with foreign-owned boats, but, in fact, was competing against the other two forms of transport in this country, namely, the roads and the railways. Still, I think some differentiation can be made in the case of the canals; they are in an exceptional position, and if the new Clause were accepted it would encourage them to make still further improvements in their particular form of transport.