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The Motor Legislation Committee's Opinion
What the F.B.I. Thinks and Suggests TTIE organizations represented on the Motor Legislation Committee comprise the R.A.C., R.S.A.C., A.A., S.M.M. and T., British Cycle and Motor Cycle Manufacturers and Traders Union, Institute of British Carriage and Automobile Manufacturers, M.A.A., M.T.A., Scottish M.T.A., and the Agricultural and Road Machinery Manufacturers' Association.
The Committee points out that the Conference on Rail and Road Transport was really the outcome of representations made by the railways respecting the Final Report of the Royal Commission on Transport, these being associated with an intensive and costly publicity campaign. In its essentials, the problem which the conference has reported upon was dealt with by the Royal Commission more impartially and with greater authority.
As to the terms of reference, it is suggested that a body consisting exclusively of railway and goods transport representatives should not have been invited to consider "the facts relating to the incidence of highway costs in relation to the contributions of the different classes of mechanically propelled vehicles." Consideration of such facts was necessarily approached from the angle of the goods vehicle only, yet the logical application of the Conference plan to other classes of road vehicle will produce greater disturbance to some of these than the class that it was intended to affect.
No Authority to Nan New Taxation.
It is in the highest degree unfortunate that a new basis of taxation, involving all motor vehicles, has been put forward by a conference which had no real authority to produce such a plan. So vital a defect in the constitution of the conference and its terms of reference destroys completely the value of the report as a guide for Parliament.
The revenue from the taxation of motor vehicles and of petrol is sufficient to defray all road costs, and the fact that more than half the money is taken by the Chancellor for other than road purposes is a grievance against the State.
To compare the railway track costs of £64,000,000 with the road cost is clearly unsound. Of the railway costs, no less than £36,000,000 represents 41 per cent. interest on £800,000,000 of capital. The construction of the roads is financed out of current revenue or by relatively short-period loans, and the capital is repaid. On the other hand, railway capital, generally speaking, is not repaid and remains a permanent charge on current revenues. If railway capital had been repaid during the productive life of the assets it was raised to provide, the capitalization would now correspond more closely to the value of the effective assets, and operating profits would return substantial dividends.
It is extremely improbable that road expenditure for the current year will reach £60,000,000. On the ether hand, it is estimated by the Chancellor that the revenue from vehicle taxation and petrol duty will amount to £62,000,000. Yet the only taxation proposals recommended by the conference are designed to increase the yield from heavy vehicles by more than 12,500,000, with the sole object of diverting traffic from road to rail, decreasing the total tax yield.
It is submitted that the schedule of taxation is unsound. The method is based upon a series of unauthenticated averages in mileage, laden weight, petrol consumption and other factors possessing immense possibilities of error. Part of the yield is already assisting the railways to compete with road-transport operators, who are specially taxed, through the petrol duty, to finance the derating scheme from which the railways derive substantial benefits.
The Motor Legislation Committee suggests to the Minister that if the conference report suggests anything at all it is that: (1) the existing burden of motor taxation is excessive and unfair in its incidence ; (2) that road transport contributes in total amount an altogether disproportionate share of the cost of the roads; (3) that there should be a substantial reduction in the special taxation now imposed upon motorcars and motorcycles.
It submits that the report is not intended to provide a fair and equitable basis of motor taxation on merits, but to carry out the railways' desire to increase transport costs.
IN considering the Salter Report, the Federation of British Industries appreciates the limitations imposed by the terms of reference, which restricted the inquiry to the relationship between rail and road, transport. In formulating its views, the Federation, however, had to regard the questions at issue from a broader standpoint, as representing the interests of manufacturers and industrialists who are materially affected by the problems examined by the Conference, both as producers and as the main users of transport.
Industry must have the cheapest and most efficient system of transport possible upon an economic basis. This system must include efficient and economic railways, which are an essential part of our national economy. Under modern conditions, road transport is equally indispensable.
The Federation regrets that the report offers no remedy for the_major causes of the economic troubles of the railways, which originate in conditions which have resulted in high costs of operation and unduly burdensome charges for transport, and it suggests that any attempt to palliate these effects by the imposition of regulations upon competitive transport must impede the solution of the real problem.
The Federation recognizes that some of the heavier vehicles do not pay, by way of direct taxation, a fair contribution proportionate to that paid by vehicles of lighter types, but it cannot agree to the suggestion that an impost necessarily equal to the petrol tax should be placed upon non-petrol-using vehicles. Such a proposal may be exceedingly harmful to British industry, by discouraging the development of transport vehicles using home-produced fuel.
The restriction imposed by the Locomotive Act of 1865 and similar legislation notoriously hampered the development of the internal-combustion-engine industry. New restrictions, such as those proposed, may have similar disastrous effects on newer forms of locomotive power, such as the compression-ignition engine.
Any increase in the taxation of steam wagons would deal a most serious blow to the most depressed section of the coal trade, which supplies one million tons of coal a year for the consumption of these vehicles. It would, incidentally, reduce railway traffics in coal.
The Federation has the strongest objection to the principle that the granting of a licence should depend upon the wages paid to the operating staff being approved by the licensing authority, as all conditions covering mechanical efficiency and the safety of the public are governed by the Road Traffic Act, 1930, and there is no necessity for the imposition of a restrictive licence system of this kind.
The keeping of a record of journeys would be of very little real value, and would add to the overhead costs of productive industry and to public departmental expenditure.
The Federation does not agree that an ancillary user should be prohibited from carrying goods for hire on return journeys.
The Federation urges that the 25 per cent. rebate for vehicles exclusively employed within a port area should be extended to such ancillary users as require their vehicles solely for their own use within a defined locality.
Against Discrimination Between Traffics.
The Federation is entirely opposed to the suggestion that the Minister of Transport should be given power to prohibit classes of traffic from being carried by road. Certain heavy goods cannot be carried by rail, whilst the interests of industry may require that goods now carried by rail should be carried by road.
It is frequently necessary to provide vehicles of special types or intended for a specific purpose, which, in consequence, are employed on rare occasions. In these cases, if the duty be calculated on weight or carrying capacity, the cost might be prohibitive. The Federation believes that an ad hoc duty should be charged for the use of such vehicles.
The Federation suggests that, instead of handicapping the road-transport industry with restrictions tending to have a similar effect to those now operating on the railways, the real solution should be sought in removing the present disabilities of the railways and reducing the cost of transport.