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THE MOTOR TAXATION INQUIRY.

27th February 1923
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Page 21, 27th February 1923 — THE MOTOR TAXATION INQUIRY.
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The Effect of the Reintroduction of a Petrol Tax Upon the Commercial Vehicle Industry. A Possible Increase in the Burden of Taxation.

MR. R. J. SMITH, secretary of the Royal Scottish Automobile Club, continued his evidence before the Departmental Cornmittee.on Motor Taxation at Middlesex Guildhall on Tuesday of last week.

Mr. Smith gate the figures of two large wholesale distributing establishments in Glasgow for the past. 12 months. 'In one ease, they had 73 commercial vehicles in eommission. These consumed on a mileage of 697,000 119,000 gallons of petrol, equal to a consumption of one gallon per 5.8 miles. They paid in taxation an average of £26 per vehicle, equivalent almost exactly on their petrol consumption to a tax of 4d. per gallop. In the other case 77 were in commission. Their annual mileage was 713,000, and their petrol consumption 82,000 gallons. The consumption consequently was a gallon per 8.7 miles and their average tax 223 108., which was equal to about 54d. of tax on the petrol consumed.

A Higher Proportion of Taxation for Commercial Motors.

Until the readjustment of taxation in 1920 the commercial vehicle was bearing a comparatively light portion of motorcar taxation for road purposes, and this freedom was possibly derived from the absolute freedom which commercial horse-drawn vehicles had in the days when the carriage tax was applied only to private carriages.

It was quite evident from any noint of view, that the commercial vehicle was not now bearing its fair proportion of taxation according to road usage. Ile quoted statistics of a census made in six Scottish counties to show that the tonnage of motorcars and motorcycles was only 33 per cent. of the total tonnage

of motor vehicles. . .

As a result, the apportionment of the burden of taxation under the new system would be, under a petrol tax, that the private vehicle class would pay in 1924 40A7 per cent. of the taxation, and the commercial motor vehicle and hackney class 56.89 per cent.

The existing taxation apportioned the burden in 1922 at 53 per cent. on private vehicles and 45 per cent, on commercial vehicles.

Replying to Mr. E. S. Shrapnell-Smith, witness said he did not propose to shift part of the burden from people who owned private cars to people who did not own cars.

Mr. Shrapnell-Smith suggested that owners of public service or commercial vehicles would pass the tax on to members of the community. Witness said it would either be passed on or the profit from the commercial vehicle would be proportionately less, but that did not apply to the individual commercial vehicle owner except in selected cases. The tax might be passed on or it might not. In the aggregate, private vehicles were bearing more than their equitable share, and consequently commercial vehicles were not bearing their full share.

Replying further, witness said he had consulted the Scottish Commercial Motor Users Association and had had many meetings with them. Mr. Shrapnell-Stnith : Do you produce any official view from them?

Afraid a Petrol Tax Would Cost Them More!

Witness: No, it would not be fair to them at present to quote their official view. I think I can say quite frankly that the Commercial Motor Users Association of Scotland would have supported generally the bodies who had submitted the scheme if they had been satisfied that, individually, the petrol tax was not going to cost them more in the future than they were paying in the past. (Laughter.) I think their objection rests on that ground only. Mr. Shrapnell-Smith : They did pass a resolution in favour of a petrol tax when they were incompletely informed and afterwards passed a contrary resolution?

Witness: Yes, because some of them found on investigation it, was going to cost them more. He added that he thought ultimately they were going to reduce faxafion. The commercial motor user was not far-seeing enough to appreciate that fact.

Proportioning the Tax to Road Wear.

Mr. Shrapneil-Smith asked how he arrived at the conclusion that commercial vehicles were preferentially treated.

Witness: Because, on an equitable basis, which we think is contained in the proposals for a petrol tax, they are not paying anything like the proportion they would pay under that tax. He thought the propor tion he had submitted was quite fair. It should be the nearest equivalent to the damage caused by the traffic, that the committee could arrive at. He had not considered the produce,of that-taxation in relation to the proportion it bore to the total road cost. Any taxation of any class of vehicle would not nearly reach the road cost.

r. Shrapnell-Smith: I venture to say that is a very unwise submission. It could be disproved on any road.

Witness : I don't think it could be disproved. Mr. Shrapnell-Smith : How, without the evidence of the produce of those commercial vehicles in taxation, can you say they are not bearing their fair proportion 1 Witness: It is just a general impression. I think it is borne out by all the facts and figures on the weight carried-by the roads.

But you don't know the cost of the roadsl—I know it is five, six or seven times the figure we are legislating for at the moment.

Witness instanced roads in Lanarkshire near Glasgow which he said were costing several thousand pounds per mile per annum. Mr. Smith resumed the witness's chair when the inquiry was continued on Wednesday.

,The Figures of the A.A. Questionnaire.

In reply to Mr. Frank Pick, witness said that 99 per cent. of the 35,000 who replied to the Automobile Association's questionnaire were in favour of a flat rate tax on motor spirit used.

Mr. Pick suggested that the great majority were actuated by self-interest.

Mr. Smith. however, would not admit this and said they had probably long formed the view they held that the one method of taxation was preferable to others. The statement was made that the cornmittee themselves were in favour of a petrol tax. Mr. E. S. Shra.pnell-Smith: lf it could be done. Witness thought that the commercial vehicle owners whoreplied to the questionnaire were a fair sample of the smaller class of user, but would not include the very large mileage people. Mr. Pick questioned witness regarding statistics of cars, particularly commercial vehicles, in use since the war.

Witness did not agree that,. owing to the trade depression which set in, the year 1921 was less advantageous from a commercial road transport point of .view than the year 1920. The committee, he pointed out, estimated that the number of commercial goods vehicles would he 100,000 in 1921, whereas the actual number was 135,000. He admitted that the growth of private cars was relatively greater. Mr. Smith expressed the view that a 4d. or 5d. tax would be a fair exchange for the present taxation. Mr. Pick said the real trouble was that a fuel tax was not necessarily fair in its incidence.

Mr. Smith : Possibly not. It is the fairest we can suggest at the moment.

Mr. Pick : It is your only solution? Mr. Smith: It is the Only one we have put through.

Stopping and Starting of Buses Affects Consumption Figures.

Mr. Pick mentioned a Scottish omnibus company operating in a hilly district who, he said, were only able toiget about half the mileage per gallon from their buses as compared with London. Mr. Smith expressed astonishment and said he understood petrol consumption was excessive with buses because of the starting ana stopping. Mr. Pick : So I should have to pay tax for stopping and starting for the convenience of the public?

Mr. Smith: The stopping and starting is measured. by this self-interest of which we have heard a little. (Laughter.) He admitted that many other factors were involved than use of the. roads. Many small users, he declared would adopt motor vehicles for

B38 road transport purposes but for the present taxation. He would not like to ask the committee to impose a petrol tax of 31d. It Would be far better to make it 4d. or a fraction over 4d. and be on the safe side.

Mr. Pick suggested that a tax on the commercial vehicle was a tax on trade.

Mr. Smith replied that it was a fair running cost. He did not agree that it was always passed on to the consumer. It would not necessarily be cumulative, but it would have to be taken into account.

Mr. Pick suggested that it was taxing decentralized industries which had been taken into the country out of the towns.

Mr. Smith, in reply, said it would be a, diminishing rate-of tax and might be less than the 4d. suggested.

Two-thirds of Taxation to Commercial Users.

When Mr. Pick remarked that tho proposals must mean cheaper pleasure motoring and dearer trade motoring, Mr. Smith said in some eases it would cost less to the private owner, but their contention was that they ought to pay less. He contended that the allocation of one-third of the taxation on private owners and two-thirds on the commercial user was not unfair as between the two classes of road users.

Replying to Sir Thomas Berridge, he said a petrol tax was no more a tax on trade than the existing tax. A great deal of so-called pleasure motoring was really utility use.

Replying to Mr. Sidney Straker, he said he thought the large users would reconcile themselves to paying a fair share of the burden. (Laughter.) Be thought the Scottish Commercial Motor Users Association would have been quite prepared to support the petrol tax but for the opposition of one or two dominant interests to whom financially the whole scheme meant extra payment. He put the question to the director of one firm, who.saicl quite frankly that a petrol tax would cost them more, but he said he thought it would be fair.

The opposition, he added, was likely to come from a 'limited number not sufficient in themselves to create any disturbance over the imposition of the tax Mr. Shrapnell-Smith put some questions to witness as to what he meant by" large mileage people." Witness said he would call them people who owned from a hundred vehicles upwards. He would not regard the man owning four or five vehicles as being in that class. It was aggregate mileage he had in mind.

Mr. Shrapnell-Smith asked if it was within his knowledge that the small man could only keep on the road by running " all out? "

• Witness: No, I could not say that. He added that he could not say whether the small man as a rule complied with the trade union rules. Generally speaking, the big owner was inure efficient in organization than the smaller man.

Mr. Shrapnell-Smith: Do you think it is in the interests of the public to adjust taxation in favour of inefficiency?

Witness : No, I do not think so. I think it is in the interests of the -public that the efficient man should bear his full share of the public burdens.

He added that he would be prepared to see the (id. tax put on again if it Was necessary to raise the money. He would rather have a flat rate of 6d. than the continuation of the existing system.

A Large Rebate for Private Owners.

Mr. Shrapnell-Smith alluded to the proposed rebate of l. millions sterling to private owners' and asked if the committee should put forward such a proposal regardless of the reception it would have in the House of Commons.

Witness said that, provided the committee were satisfied as to the adequacy of the scheme, they should put it forward irrespective of the reception it was likely to get. The committee adjourned till to-day (Tuesday). "


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