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The Tax on Petrol.

1st May 1928, Page 39
1st May 1928
Page 39
Page 40
Page 41
Page 39, 1st May 1928 — The Tax on Petrol.
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INTRODUCING his light-oil-fuel tax of 4d. -I-per gallon, Mr. Churchill, in his Budget speech, made no secret of his attitude tOwards mechanical road transport. In his view the . State ought to hold the balance between road and rail transport. If road vehicles inflicted more damage on the roads than they paid for it was unfair to the community.

Again, he stressed the fact that the Road Fund and the road authorities were spending over 150,000,000 a year on roads which were already the best in the world, and still larger revenue was coming in for the purpose. It was not in the public interest to spend in the next few years several hundred additional millions if the result was to render artificially and prematurely obsolete the splendid railway system representing a thousand millions of British capital and giving employment to 700,000 men.

Local authorities appealed for greater assistance from the State to meet the burden itnposed upon them by the rapidly increasing motor traffic.

With this prefatory statement of the general principles, Mr. Churchill went on to announce the new duty of 4d. per ,gallon on light hydrocarbon oils, including petrol, other forms of motor spirit, kerosene and white spirit, which will supply a substantial part of the revenue required for the Government's great policy of rating reform and rating relief to productive industries. In 1928-29 the tax will yield £14,000,000, in the next full year £17,800,000 rising thereafter by about £1,250,000 a year.

The Fall in the Price of _Petrol.

MR. CHURCHILL contended that a tax of Ili4d. would not prevent the rapid progressive increase of consumption, the recent extraordinary fall in prices making it singularly opportune. In five years the retail price of No. 1 motor spirit in London had fallen from 2s. to 1s. Oid. per gallon, and since the beginning of 1927 it had fallen by 5d. He understood that about half the present price was represented by the cost of distribution anti that considerable compression might be effected. —[The purport of which remark is not at all clear to C .} All oil used on fishing fleets and bunker oil would be free. The duty would also be remitted in respect of ail used in agricultural tractors for the purpose of tillage only, but not for stationary engines. After recognition of the disappointment which would be felt that the only reply to the recent petition of 900,000 motorists advocating the substitution of a petrol tax for a horse-power tax should be an additional tax on petrol, he said such a delicate and intricate change could not be• made now, although he was not closing the door to further consideration of the idea. The burden upon commercial vehicles, If a change-over were made, might be raised so sharply and heavily that a real shock might be given to a new and already indispensable agency in our economic life. He referred to the difficulty of the chemical frontier and the giving of rebates in the case of petrol used for other purposes than road transport. He hoped that motor owners would consider the Budget as a whole and form their opinion as citizens and not as motorists.

Reduction of Light-vehicle Duties.

HEproceeded to announce that there would be a series of mitigating reductions of licence duties upon lighter goods vehicles and hackney vehicles, and a rebate of 20 per cent. in licence duty for all heavy vehicles fitted with pneumatic instead of solid tyres. There would also be a subsidiary remission for certain kinds of trailers. These matters would be more fully dealt with later on by the Minister of Transport.

Opposition to the Tax.

FROM opinions gathered in the lobby, Mr. Churchill's proposals have not been well received by those members more closely identified with road transport and motoring. It is, In their view, the only blot on a good Budget. It is expected that much opposition will develop in the House of Commons and in the country, but, whilst the new tax may undoubtedly be extremely unpopular, the most strenuous fight against it will have very little effect upon the Chancellor. It is an essential and , , . important part of the framework of the new rating proposals of the Government, which are ultimately designed to relieve the producing industries of the country, and which will figure as a great policy of the Unionist Party at the General Election in May or June of next year.

The Budget has been carefully built up, one part resting upon another and even at the risk of criticism and unpopularity the Government will not alter its plan. The popularity of the conception of the Budget as a whole will largely, overshadow criticisms . of the further taxation a road transport. Nevertheless, it is inju

• dicious to display to Mr. Churchill an undue quiescence under his yearly assaults.

There is a general feeling that the motorists themselves have made a tactical error (which, by the way, was avoided by the heavy vehicle side) in their constant endeavours to shift the tax from horse--power on to petrol. The result is what might have been expected, and a warning written in The Commercial Motor and its associated journal The Motor many Months ago against harping on the petrol, tax has now been amply justified.

The Hardship of 1928.

WITH an opportunist filling the office of Chancellor of the Exchequer (and he is humorist enough to accept the description), it was, of course, foolish ever to suggest motor fuel as a fit subject for taxation, and to pursue it when the possibility of it becoming an additional and not a substituted tax was disclosed. Taxation on a fair scale on petrol consumed, with a nominal fee for registration, would appeal to the small consumer ; the consumer of large quantities, however, has always preferred the bulk tax.

The hardship. of the new fuel tax is that for the ensuing eight months of the year every motor user is taxed twice at the full scale— once on the unabated licence scale, already in force under the Finance Act of 1926. and once on the fuel consumed. The price of fuel may, at the moment, be cut, but there is no telling how soon or how suddenly the petrol-price war will end, and once more petrol will go to "whatever it will fetch," as Lord Bearsted said on one' famous occasion.

With the exception of the van weighing unladen 12 cwt. or less, every goods-carryingor passenger-carrying vehicle gets the benefit of a rebate on the licence fee, as set out in the table on this page, but the higher-capacity vehicles in either class only if they' be shod with pneumatic tyres. With these higher 'loads large-diameter tyres are necessary, and there are' limits to the space that can be left between the twin tyres on a wheel. With cambered roads the inner tyre works on a smaller radius, and on curves the two tyres differ in the distances they want to run. The effect of this is friction between the wall of one tyre and the wall of the other, and, as a result, 'twin tyres on heavy vehicles often do not cover 5,000 miles, Whilst from 15,000 miles to 18,000 elS Miles may be regarded as the possible attainable life. For this reason we forecast greater attention to the six-wheeled vehicle, both for passenger-carrying and goods-carrying, because the tyres on the rear wheels are better in tandem than alongside each other, and the defect is avoided of the overheating of brake drums (with a destructive transference of the heat. to the tyres) through lack of cooling caused by the overhang of the inner of the tyres on a twin wheel.

The Incidence of the Concession for Pneumatic Tyres.

-WITH regard to the special rebate of 20 per cent. in the case of vehicles equipped entirely with pneumatic tyres and seating more than eight persons, or, in the case of goods vehicles, those similarly equipped but exceeding 2 tons in unladen weight, the matter is of particular interest to us in view of the fact that in January of this year we published a comprehensive article dealing with the claim of the pneumatic-tyred vehicle to lower taxation, and it may be permissible to reiterate a portion of our remarks. This was as follows :----" Instead of diverting huge sums of money from the Road Fund, would it not be vastly preferable to permit at least some of the excess to be employed in reducing the taxation on the heavier classes of commercial vehicle on which their owners employ pneumatic tyres or who make arrangements to have the present solid tyres changed over to pneumatic equipment? We are firmly convinced that such a change would reduce the expenditure necessary on road upkeep by a vast sum which would far more than cover the amount utilized in making the concession in vehicle taxation. Eventually, the pneumatic tyre will practically supplant the solid, except, perhaps, for the very heaviest loads, and if this change-over can be expedited it will be of material benefit to the whole community."

The rebate is certainly a step in the right direction, but, In our opinion, it is not quite large enough. Take the case of a 5-ton goods vehicle. This is taxed at £60, and the result ,of equipping it with pneumatic tyres all round would be a reduction in the duty of only £12.

As the cost of conversion to pneumatics may he £100 or me. there may still not be sufficient inducement.to owners to change the equipment, but we must, of course, consider the matter from other points of view as well. The reduction in tax will certainly not be the only fillf111; cial gain. The potential money-earning value of a vehicle on pneumatic tyres is considerably enhanced, not only because traders consider that, goods carried by such vehicles are less liable to damage, but from the fact that much greater mileages can be covered.

The tax on petrol is undoubtedly a very severe blow to the whole commercial-motor industry, but even in this respect the employment of pneumatic tyres would certainly do much to temper it by giving a greater ton-mile age per gallon of fuel consumed. • In changing from one equipment. to 'another, tlie user is, of course, bound first to consider the initial cost, but sight should not be lost of these other factors. We know that many fleet owners who constantly deal with heavy loads on long-distance services are convinced that pneumatic tyres will soon be employed upon all but the very heaviest vehicles. Already many are utilizing pneumatic tyres on the front wheels of 6-tonners to 7-tonners and tractorlorries, and these have been found to give something like double the mileage of the solids they replaced, apart from reducing the fatigue experienced by the driver and promoted by vibrations transmitted on the road. Unfortunately, although this is a considerable step in the right direction it will not at present affect the tax, and we would suggest to the Chancellor of the Exchequer that it also deserves some consideration, such as a 10 per cent. rebate.

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