Mr. Shrapnell-Smith, in addressing Mr. Churchill, said :—
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" We are in a position of some difficulty, having regard to the hundred and one forecasts concerning your intentions which have appeared in the Press during the past few months, and we are approaching this matter with the hope that all of them are wrong, and that you have no intention of taking Road Fund money for other than highway and bridge purposes.,
The members of this deputation for whom I speak represent owners whose passenger and goods vehicles are implements of trade and who provide in course of their operation, and exclusive of manufacture or supply, direct. employmelt for over 800,000 people, i.e., some 100,000 more than do the railways of Great Britain.
" The capital utilized in the operation of some 300,000 vehicles in regular use, and in the provision of spare vehicles, depots, repair shops and plant, coach and body shops, stores, spare and renewal parts and units, trading and wages accounts and reserve funds, is roughly £250,000,000.
"We are, on the goods and retail distribution sides (quite apart from bulk or wholesale delivery work), in daily and intimate touch with the community at their very doors. Not fewer than three million houses are served daily, whilst between five and six million passengers are carried daily. All the railways in Great Britain carry on an average only some three .million passengers daily.
"We remind you of the formal and minuted promise which was given to our representatives, amongst others, in March, 1920, that none of the money raised in direct motor taxation under the scheme which was later made part of the Finance Act of that year should be applied otherwise than • is, in fact, laid down in the Roads Act of the same year.
"We rely upon this pledge that the Fund was to be specifically applied, and protest against any money raised as the outcome of it being diverted by retrospective legislation.
"We fail to see how any proposals to divert money from the balances in hand on Road Fund Account can be adopted, having regard to the financial position and commitments which are set forth on page 3 of the last report (1924-25) on the Administration of that Fund, which shows that in relation to cash balances to the credit of the Road Fund on March 31st, 1925, of 118,140,3g6 4s. 4d., the estimated. commitments were £36,087,000. The demands upon the apparent surplus and upon the Rand Fund are clearly
not yet fully met, having regard to the needs of various main roads and bridges, to say nothing of the needs of .
various rural roads. .
"We consider that the Road Fund is adequate as at pro;mit constituted and levied if it is applied as laid down in he Road a Act, 1920. Raving regard to the needs of various roads to Which your attention has been drawn by other deputations, it is difficult to comprehend why the money has been 'saved up instead of being spent. We also consider that Many' unclassified and classified roads are in their Present condition because too much money has been spent (admittedly to relieve unemployment) on new arterial roads which are little used.
"We wish to point out that; if any money is diverted from the Road Fund, this special taxation becomes a tax on transport, which is not in the public interest, in that it must be cumulative in effect and cause the consumer to pay increased prices for commodities; and must add generally to the cost of living—including travelling.
" We urge that it is in the national interest to scrap as many weak roads and to reconstruct them according to modern practice as the resources of the Road Fund will allow. We challenge the economic '.wisdom of putting a direct tax on road transport other than for the purposes ot toad and bridge maintenance, improvement and construetion.
"We direct attention to the uneconomic consequences' resulting from weak bridges. Prohibition of traffic over these is largely comparable to the permanent closing—were it allowed—:of level-crossing gates. More money is needed to the extent of some 14,500m0. (as was shown by the county councils' deputation on .Tanuary 27th). in respect. of some 740 county bridges, and there is at least an equal requirement in respect of bridges over canals, railways and other private and statutory works, if highway authorities (and owners of road motors) are to be saved from unproductive expenditure upon millions of waste miles of running annually. This enforced waste falls upon the community:
" We Very strongly urge that no money should be taken from the Road Fund while the bridge position remains as it is, and We invite you to obtain reports hereanent from Slit Admiralty and the War Office as to the serious handicaps which are imPosed upon their 'requireirents in respect of battleship and cruiser construction and gun movements and mountings. Municipalities and factories are similarly handicapped by these weak bridges in respect of boilers and other potver and process plant, as are farmers in respect of the movement of threshing machines.
"So long as roads are not treated by the Government as a national service and a charge on national revenue, we submit that there is no valid reason for taking revenue raised in reSpect of them for general national purposes, and further maintain: that good reasons remain for continuing intact the present segregation of a Road Fund.
There appears to be no such thing qt present as the residuary responsibility of the .State.' The National Excheeeer practically escapes contribution by essentially leaving the cost of roads (apart from unemployment grants) to be divided between motor Owners and ratepayers. The State Virtually escapes scot-free as regards any finaneial contribution on a regularized basis. It would appear that, instead of taking money from the Road Fund, the State' might, with advantage in the national interest, contribute substantially to it.
"We would remind you that, whilst greatly increased revenues have come into the Road Fund, as compared with the official estimates of 1919 and 1920, there have been corresponding numerical increases of registrations and of traffic, and we regard you as trustee for all the money in hand already subscribed on an explicit basis. .If any of the money so raised under the legislation of 1920 is taken retrospeCtively for other purposes, further distrust of Government promises generally, and the loss of this Gevernment's prestige must be 'the results. That such retrospective changes should be even contemplated has given risa t consternation amongst all motor owners, in common with the local authorities of the country. The respect of local authorities for central government is at stake.
"We rely upon H.M. Government not to allow the obvious desire of the railway companies to prejudice road transport to escape their due consideration."
On the question of future taxation, Mr. Shrapnel-Smith, ird(e: alit!, added :—
" If the Government decides to review and revise the motor taxation schedule of the Finance Act, 1920, as has beell intimated by you may be the case in the very near future, we submit that any changes should be founded upon
furthea investigation and exhaustive data, and should not be retrospective.
• " We remain satisfied that the single-tax system of vehicle licences is a good one, and proof of that is seen in the revenue produced. Heavy traffic interests have at no time fixed the scales applicable to them ; they have been fixed on the -findings and recommendations of Departmental committees upon which those interests had but few seats.
"If Money is to be diverted from the Road Fund, and direct motor tax:aloft is to be regarded as a tax upon transport rather than a contribution towards improved roads and bridges, we point out that.the cost will be borne by the public, and we fail to see why the cost to the public should he increased until it can be shown that the Road Fund is inadequate. Abstraction of money from it might, of course, render it inadequate.
"It is true that greatly increased revenues have come into the Road Fund, as compared with the official estimates of 1919 -and 1920; there have been corresponding numerical increases of registrations and of traffic.
"We point out that, apart from any consequential expense on the straightenings and/or widetting,s of highways, in order to permit overtaking and to improve flow, once the strength of a highway is adequate, additional traffic units do not increase the total annual cost in direct ratio with the numerical increases. On the other hand, so much of the extra traffic units as complete or make part of their journeys on weaker roads may add to the cost of these roads in greater ratio than the arithmetical, and it is on these roads that more money should be spent. The money has not been spent on them—the unclasaified rural roads.
"Taxation strictly acecirding to 'user' is, we submit, no more possible than distribution of proceeds strictly according to 'user' is possible. A measure of fluidity, of give and take,' must be admitted. If 'user' instead of the more usual 'ability to pay' is enforceable in practice, we feel that distribution of the proceeds must he equally precise. All should go to the local authorities in strict relation to such ascertained user.'
"It then arises to determine:—(1) Is taxation to be according to 'user' of the engine, of the vehicle or of the road (if of the road, in relation to weight, speed and superficial area occupied per :person and per ton)? (2) How is 'user' to be gauged or measured? (3) Is ' user ' to be conditioned according to its being private, or public service, or commercial? (4) Is type of tyre to he a factor? (5) Is quantum to be anted .favourably, as in the Post Office scale of charges, by class and weight?
"We desire to direct your attention to the partial analogy of the respective charge scales for letters, printed papers and newspapers by the Post Office, where the basic divergence of ratio is as 1 to ft 'for equal weights conveyed. Newspapers are rated lowest, and it would be harmful, if not dangerous, to disturb this principle,
"The complexity of the problem, is recognized by all of us. The 'word user,' we find, is quoted and applied in loose and contradictory &elites. Our aim is not to be obstructive, but to enforce the fact that those who have gone minutely into the whole case, including two appointed representatives of the Treastry, have found the problem of securing more than an approximate result for all otners to be insoluble.
"We scarcely need to remind you that any tax on internal transport falls on the production, the commerce, the food, the clothing, the travelling and the social life of the people. Renee, whatever may be imposed, it is of economic importance to keep the taxes down to rational and fair amounts, Such taxation, it is our duty and wish to urge, cannot be a desirable source of excess revenue or of profit in relation to production, manufacture or export trade, in each of which every -fraction of cost per unit is of cumulative effect in retarding business. .
"We still consider that the question of incidence has not been fully investigated, and that the adoption of any haphazard, penal or vindictive scale is to be deprecated from every point of view.
" Aa regards allegations by railway interests that they subsidize road transport by paying highway rates (about £1,410,000 4 year itc all), if railways were Charged nothing for highwaYs, which they use enormously, and gave the whole benefit of such exemption to freightpayers, an allround reduction of railway rates of only id. a ton, regardless of distance, would be the total benefit tc agriculture and industry (338,000,000 "tons of rail-borne traffic annually). As the average length of haul is over 50 miles, the saving possible is under 1-50th of a penny per ton-mile."