Duty Attacked by M.P.s
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Sir W. Wakefield, was a premium on efficiency. The reason that industrialists purchased vehicles in which to carry their goods was to help them become more efficient.
He quoted figures to show that increased depreciation amounted to about 12-d. a mile for a 6-ton livestock carrier, and 3s. 7d. a day for an ordinary 5-ti-boner on a tonnage basis.
Opening the -discussion on the increased fuel tax, Mr. Oliver Lyttelton asked whether the higher duty were intended as a revenue tax or a means to restrict consumption. Many of the increased costs could not be absorbed by the transport organizations and industry, and higher charges would he inevitable.
Already there were forecasts of higher prices for foodstuffs, and the cost of living would be increased by an estimated l per cent. The motor industry would be particularly affected as many components were transported by road. Manufacturers also used large quantities of fuel for testing and delivery, and the tax Would bring a direct increase to the cost of exports.
The Minister of State for Economic Affairs, Mr. Gaitskell, stated that ,the fuel tax had been increased to find money for the income-tax remissions. Quoting figures from "The Commercial Motor" Tables of Operating Costs, he sought to prove that the proportion of fuel costs to total operating costs was lower now than it had been before the war.
Effect on Prices
The higher duty represented an increase of 3 per cent, in operating costs and he could not see how this could cripple any business. Only in cases where transport costs formed a high proportion of the total costs of a commodity would the price be commensurately affected.
Mr. Peter Thorneycroft asked why the Road Haulage Executive had put up its rates by a minimum of 7i per cent, if operating costs were now higher by only 3 per cent. The road haulage industry carried a burden of £225,000,000 a year in taxation. No tax could have been better designed to force up prices and increase export costs.
The Chancellor of the Exchequer, Sir Stafford Cripps, pointed out that the 71e.per-cent. increase in R.H.E. rates was designed to cover, other increases besides that of fuel, The Opposition amendment to remove the clause in the Finance Bill introducing the higher duty was defeated.
An amendment to exempt users of stationary engines and works trucks front paying the higher tax was also defeated. Mr. Littelton pointed out that the duty placed an extra cost on industry, and he did not think that exemptions would create administrative difficulties. Mr. Erroll considered it iniquitous that factory vehicles should bear the increased duty.