. . . an opportunity in 1965 to vary the ritual'
Page 65
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IF at the beginning of any year the organizations representing road users neglected to ask the Chancellor of the Exchequer for a reduction in taxation the nembers would almost certainly complain bitterly. It is ,ommon knowledge, however, that the traditional approach n normal circumstances stands no chance of success. The )1d arguments, weighty though some of them are, have )ecome threadbare through repetition and there are seldom iny new points to put forward. If the spell did not work vith the Chancellor 12 months previously, he is no more ikely to be persuaded now.
For-the first time in many years there is an opportunity n 1965 to vary the ritual. New developments call for a nore serious reappraisal than Chancellors have usually riven to the subject of road taxation. In his autumn Budget VII% James Callaghan increased the tax on liquid fuel by 6d. a gallon to a total of 3s. 3d. He can hardly suppose that his rate of taxation can.be allowed to continue without :urther comment. Another consideration arises from the iebate initiated by the railways on relative road-rail track ;osts which presumably could be adjusted by fiscal means.
Successive deputations are bound to remind Mr. 2allaghan that his extra 6d. was not put forward as a permanent impost. It was one of several measures, notably the 15 per cent surcharge on imports, designed to restrict spending. When the surcharge is taken off, the additional fuel tax should go with it and would in fact no longer have even the slender justification given by the Chancellor when he imposed it.
Commercial road operators should pursue the matter a good deal further than this. What Mr. Callaghan had in mind was that the discouragement of imports would release purchasing power which the fuel tax would help to absorb. In this way the risk of inflation would be avoided. Whether or not one agrees with the general policy behind the autumn Budget, this reasoning might possibly be accurate when it relates to fuel used for pleasure motoring. It overlooks the fact that well over 40 per cent of the liquid fuel which goes into road vehicles is used by goods and passenger carriers and that a large proportion of the remainder is used for business purposes.
Far from absorbing the inflationary effects of the import surcharge the extra 6d. has reinforced them. Hauliers were forced to put up their rates as soon as the bad news was received; passenger fares are increasing probably over the whole field; and higher transport costs have played an important, if indeterminate, part in the recent alarming spate of price increases of all kinds.
There is a powerful case for taking the 6d. off. Road operators should emphasize that tinkering with the fuel tax, while it may be a temptingly easy way of raising money, has unpleasant side effects and should never be used as an industrial regulator. The lesson might even be pressed further home. At 2s. 9d. a gallon the tax was still too high. Mr. Callaghan could easily cut the amount back to half a crown and please practically everybody. He need have no fear that revenue would fall. The growing volume of fuel consumption would ensure that road users provided each year a greater source of income.
Some prominence has been given to the argument that for certain classes of road user the income is not sufficient. The Chancellor is not likely to have been much impressed. In any ease he has available the findings of another Government department, the Ministry of Transport, which gives no basis for suggesting that any category of user fails to provide in taxation more than enough money to meet its fair share of road expenditure. The representatives of each category will no doubt be pointing this out in their separate approaches to Mr. Callaghan.
They should find it a welcome change to be no longer merely going through the usual motions. Whatever the spectators may think of the customary ritual, and however strongly they may demand it, the performers must often feel bored. The same may be true of the Road Haulage Wages Council. Their procedure, unlike that of deputations to Ministers, is prescribed by legislation. It can be just as frustrating and pointless, at least in certain of its phases. The machinery for publishing proposals, examining objections and publishing the final statutory scales of wages has produced not a single modification throughout the years. The sole discernible effect has been an occasional restiveness when the process appears to be taking longer than usual.
Relief from these particularly tedious observances is heralded by proposals which the national council of the Road Haulage Association will be considering next week for the establishment with the trade unions of a national negotiating committee to discuss the whole field of industrial relations including wages, hours, working conditions, training, education and serious differences of opinion.
The proposals do not include dissolution of the Wages Council and British Road Services will continue to operate their own •wages machinery. Nevertheless, the reference back to the policy statement issued by the R.H.A. just under a year ago issunmistakable. A broad hint that the existing voluntary National Joint Industrial Council was of little or no use was followed by a proposal for a "comprehensive national body ". This would not merely cover the area laid out for the suggested new committee but would be asked to settle "nationally applicable wages" and would also cover B.R.S.
On this basis next week's decision will be no more than an interim measure. Replacement of the Wages Council in one move, desirable though this may be in some respects, would be too drastic a step both for operators and for the unions. The obvious sensible link is an equally balanced body, meeting regularly or on special occasions when necessary, trying to reach decisions but with a statutory net to catch those problems which prove incapable of mutual settlement. lf such problems do not arise, or disappear in the process of time, the statutory machinery can then be abolished. In the meantime the Wages Council will continue to function and is in fact meeting next Friday to examine an application from the unions for a wage increase.