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THE Chancellor of the Exchequer, Mr. Heathcoat Amory, has given the nation in general, and the road transport industry in particular, a stiff aperitif. His Budget is designed to whet the appetite of both management and workers for further effort to place the country on an unassailable economic foundation. With goodwill moderation, hard work and imagination on both sides, and barring further international disharmony, Britain's future success is assured.
The road transport industry has special cause for satisfaction. The removal of purchase tax from goodsvehicle chassis after nine years is no more than the abolition of a fiscal duty that should never have been imposed, but it is none the less welcome. It will give a great stimulus to sales and enable manufacturers' economic capacity to be employed more nearly to the full. The workers will not be the last to benefit.
Boost for Heavies In particular, heavy-vehicle manufacturers will be placed in a more competitive position with the mass producers, who, steadily increasing the payload capacities of their models and enjoying an unfair advantage created by purchase tax, have been encroaching to an alarming extent into the market previously the preserve of the " hand-built " vehicle. The specialized makers are the traditional backbone of the industry and their vulnerability to competition has been a source of anxiety. They can now look forward with greater confidence.
An important saving in capital and operating costs will accrue to users, as The Commercial Motor demonstrated last week. Unfortunately, it may be offset by a further increase in road haulage wages—with subsequent repercussions on the wages of drivers of C-licence vehicles—at a time when rates for much traffic are showing only the barest margin of profit. Even with wages stabilized and purchase tax removed, it is doubtful whether trade and industry could reasonably expect to share in the benefit of lower costs. The relief that the Chancellor has afforded would, in those circumstances, merely convert chickenfeed into an adequate diet.
Only a substantial remission of fuel tax could have any marked effect on the general level of road haulage rates and coach and bus fares. Passenger-vehicle operators in particular a r e naturally disappointed that there has been no reduction in the tax on oil fuel, to which they had looked for stability in charges and the restoration of unremunerative rural services.
The cut in the annual licence duty on public service vehicles by two-thirds is, however, a useful concession, especially as a rebate may be claimed on tax already paid at the higher rate. The new method of computation is based on a rate of £12 for a seating capacity of up to 20, plus 10s. for each extra seat. A 60-seat double-decker will in future be taxed at £32, compared with the previous rate of more than £91. The saving, on a 44-seater will be £48 a year, but that amount might well be lost in a month on a rural service worked by one bus of this type, even if it were one-man-operated.
On a mixed fleet of 200 buses, consisting of 100 each of double-deckers and single-deckers, the annual saving would be about £10,000. This amount might be enough to halt the pruning of unremunerative services, but it would certainly not prevent a further rise in fares if another wage increase were awarded. Mr. Amory's concession is no more than an earnest of his desire to help the industry.
Perseverance Rewarded • It is a matter of some satisfaction to The Commercial Motor that the Chancellor has abolished the tax on fuel used in auxiliary engines on vehicles, such as those driving refrigeration plant or gully-emptying equipment. This journal campaigned for the concession some time ago, without much visible support from the industry, and the justice of it has now impressed itself upon Mr. Amory.
Another overdue change in fiscal policy is the remission of duty on the fuel used in dumpers and other vehicles operated on sites and not required to be licensed as road vehicles. The anomaly by which tax had to be paid on fuel consumed by one item of contractors' plant and not by another has rankled for a long time.
The restoration of investment allowances on new plant, machinery and buildings and of initial allowances on them is further encouragement to the road transport operator to modernize his fleet and equipment. Socialists may brand the Budget as an electioneering device, but, even if it were, it would be none the worse for that. If it influences the floating vote in favour of the Conservatives at the forthcoming General Election, the road haulage industry will be spared, perhaps for all time, the prospect of renationalization and C-licensees will escape further restriction. Then, with the country set firmly on the road to prosperity, it will be possible to make the reduction in fuel tax for which the industry has waited so long. It is, however, a concession that can be won only by hard work and by the sacrifice of immediate benefits for greater long-term stability. Mr. Amory has shown the way: it is for the electorate to follow.