Constitutional Deafness
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COMMENTARY by JANUS
CHANCELLORS of the Exchequer deserve some sympathy, even from the interests they injure. They are subjected to so many appeals, homilies and exhortations that they may have no alternative except to cultivate a discreet deafness. It is doubtful whether anybody in the long queue of pre-Budget suppliants has ever had his wish granted, and equally there seem to be no lasting results from the great roar of protest that goes up almost before the Chancellor has sat down.
During his little day he is a creature beyond good and evil. He makes promises when they seem appropriate, and breaks them with the same facility a year later. Naturally, the promises of his predecessors have even less meaning to him. He has used--and abused—the privilege of changing his mind so often that his apologies, where they are not perfunctory or altogether lacking, have become purely a matter of ritual. Indeed the whole Budget-day procedure, marking an arbitrary division between the end of one year and the beginning of another, has hardened into a set ceremony with a whole range of hieratic gestures and customary phrases.
When all this has been said, it remains true that the treatment of the road transport industry by successive Chancellors is in a class on its own. No other interest with (one would have supposed) every expectation of a concession or some other form of assistance has been so consistently disappointed and deceived. Each Chancellor has stolidly and obstinately followed the lead of his predecessors in regarding the fuel used in commercial vehicles as a luxury (and an imported luxury at that) on a par with tobacco, tea, wines and the fuel which is used in private cars.
In his unofficial moments the Chancellor must be well aware, as is everybody else, that the road passenger industry is finding increasing difficulty in providing the services that . the public require, and that the cost of operating goods vehicles.has a bearing on the price of every commodity and on the ability of British manufacturers to compete in the export market. Even in his sanctum at the Treasury, the Chancellor cannot be altogether ignorant of these facts. They have been brought to his notice often enough. But they have not been allowed to influence his policy to the slightest degree.
POSSIBLY to rub the point in, a year ago, Mr. Selwyn Lloyd, when he introduced his so-called regulator into the Finance Act, 1961, arranged for it to apply rigidly over the whole field of Customs and Excise duties so that when the time came to put the regulator into effect later in the year there was no way open to him to discriminate between different commodities or between different users. The 10 per cent. surcharge, which worked out at 3d. a gallon on the vehicle fuel tax, fell equally on motorists and commercial vehicle operators. Not only this but the Chancellor, by his own legislation, had secured himself impregnably against subsequent requests for concessions in one particular field.
Wise from past experience, operators may have expected Mr. Lloyd to do what in fact he has now done. The lack of any widespread protest or comment outside the transport industry is perhaps a tribute to his finesse. Nevertheless, his action is questionable. The intention of the regulator was to give him the right to vary the rate of taxation within agreed limits during the course of his financial year. It was not regarded as a permanent imposition. The Chancellor himself, in his statement this year, said that it was " the essence of the regulator that it should be available for use between Budgets." In view of this, he decided to bring the regulator to an end and to ask for a similar device to see him through the current year.
By some sleight of hand, this appeared to leave things as they were before. The fuel tax was to remain the same and the Chancellor still had his regulator. Far from being able to take this comfortable point of view, the road operator ought now to see an alarming prospect opening before him. It may seem to make little difference whether the extra 3d. a gallon is a surcharge or is consolidated with the rest of the fuel tax, as has now happened. In fact, the difference is considerable. A surcharge is a temporary expedient. It is applied for a special purpose, and the inference is that it will be taken off when that purpose has been fulfilled. General taxation is part of a much more permanent structure. Since the fuel tax was first levied in earnest, there has never been a reduction.
IN his 1961 Budget, Mr. Lloyd increased vehicle licence duties by 20 per cent., apart from one or two other refinements such as the tax on lubricating oils. He kept the fuel
tax up his sleeve for the little Budget in July. Had he introduced this also in April, the protests might have been so loud as to penetrate even his constitutional deafness. As it is, he was able to announce last week that his 10 per cent. surcharge had been "more readily accepted" than, for example, the idea of a payroll tax, now quietly abandoned. He may well feel that the consolidation of the surcharge has also had a quiet reception and thus be encouraged.
The way may now seem clear to him for a repetition, or for several repetitions, of the same process. All he has to do, having been granted power of regulator, is to use the power when the moment seems 'propitious; let the public grow accustomed to it so that they hardly notice its consolidation in the next Budget, and then begin again. For some Customs and Excise duties this may be a good idea, but certainly not for the tax on fuel in so far as it is used for commercial purposes.
If one is to be honest, operators have lost the battle this time. The Chancellor will get his consolidation and his new regulator. What the Parliamentary supporters of road transport must do during the long debate on the Finance Bill is to insist that the two things should not in future be linked. Admittedly, there is no guarantee that a promise to this effect will be kept, but any attempt to break it will at least provoke a debate from which something useful may emerge.
Operators themselves must be apprehensive at the threat of endless increases in taxation with no corresponding benefits. Their aim must be, on the goods side as well as the passenger side, to have their case considered separately from that of the motorist. There is no good reason why they should have to pay the same rate of tax, or why they should not be allowed a rebate. This -is a possibility to which their representative organizations will have to turn more seriously than ever if Treasury policy continues on the lines that seem likely at the present time to be those itwill follow.