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The New Taxation Scheme. •

27th April 1920, Page 1
27th April 1920
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Page 1, 27th April 1920 — The New Taxation Scheme. •
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Which of the following most accurately describes the problem?

THE SCHEME of taxation of commezeial motor, steam and electric vehicles, framed by the Departmental Committee appointed by the' Ministry of Transport and forecasted in these' columns on February 3rd list, has been adopted by the Chancellor of the Exchequer. We may be going too far in. saying so, but the substitution of a fixed scale of rates, based upon horse-power in the''case of the private vehicle and on unladen weight in the case of the commercial vehicle in place of an import. duty on petrol, is a "recommendation to order," for the Revenue offi,cials had declared that a tax on fuel, with its rebates and allowances for special classes of Users involved difficnities in collection. The Chan' Collor of the Exchequer had, therefore, determinedly , set his face against fuel as a. source of revenue, thus . depriving the committee of . 'any power ta. suggest practical means of overcoming the difficulties. Had these been suggested and adopted, a method of taxation-which at least had the merit -of beingpropor-:. • tiariate to user, could' have been retained. .

An entirely new scheme having been adopted, however, we can now consider the effect of its application -to' corriinercial vehieles. In respect of the liquid-fuels driven. vehicle there has hitherto been paid £1 la.". on registration and a tax of 3d, per gallon on imPorted fuel used.' The price of competing fuels has been so high that, despite the fact that they have been duty free, there has not been much in it. in the matter of fuel Cost, whether petrol or benzoie wa.a used. it is difficult to draw any accurate comparisons, but, if we take a vehicle of 4 tons unladen weight and assume a weekly mileage of 3o and a consumption of a gallon of fuel per seven miles, we get a. yearly ontlay in respect of fuel duty of £31. 5s., with an initial registration fee of a guinea. Under the new scale the tax would be £28 per annum. From the £31 5s. may be deducted any saving on the use of home-produced. fuel, whilst the incidence of idle time during overhaul must be taken into account.

The wale of suggested rates for hackney vehicles' seems also, on the whole, to be reasonable. Steam and electric vehicles, however, come in for a new 'burden, which hitherto, by a fortuitous set of circumstances, they have -escaped. • The economical running _of steam vehicles has, however, given a certainmargin of profit upon'whieh the new tax does not make a very severe inroad, and,, if the electric vehicle is not quite so well off in this respect, the burden cannot be said to be unduly heavy. The position (1) of the agricultural tractor used. on the roads for haulage solely in connection with agriculture and (2) of agricultural tractors which; if used on roads, only draw farming implements necessary gear or supplies of fuel or water, is at last to be made more satisfactory, for, hitherto, they have been in rather an anomalous position, sometimes being neither flesh, fowl, nor good red. herring, and -.being treated differently by different licensing authoritie& We distinctly hold the opinion that the taxation pro • posals with regard to agricultural tractors should be put into operation at once.'

Generally speaking, -the commercial vehicle user may congratulate himself upon not being treated unfairly and up-on having his position -not' made impossible, and, therefore, may ungrudgingly admit that he was fairly represented upon the Departmental Committee.

The Need for Extending the Import Duties. HE BUDGET proposals do not embody any suggested change' in import duties on Motor vehicles or their pax ts. As the matter .now stands, a duty of Bak per ent. is levied on private ears and motorcycles and then parta:and 'accessories imparted into this country. NO similar duty ' applies'. to commercial motor vehicles or to ag-riaultural'inotor tractors.. 'The discrepancy is one to which we have drawn attention on previous occasions.' ' The arguments in favour 'of an 'extension of the duty to cover the wider 'field are now stronger than ever; and we .trust that some effort, will be made to secure the-necessary amendment 'before the .Present Finance Bill becomes law. Thedifferentiation between private cars and commercial vehicles is, no doubt, based on the idea that the former is a. hixury and the. latter a necessity. • Neither assumption is necessarily true in every ease. So long as there was a definite, shortage of transport vehicles and this shortage was likely to continue for some time, free imports of this class were perhaps justifiable.' Now,' the home manufacturing industrY _is 'getting into its stride; and its output in the near future will be far greater than it has even been before. Meanwhile, huge .numbers of sprplus Government vehicles are to be thrown upon the market, their disposal being in no way controlled by the industry or its agents. . There is, of course, still a. very slight protective effect as against America in the rate of exchange with that country. On the other hand, the rate of exchange with FranCe and Italy has moved a long way. in the other direction during the past few months. •

. We have, in respect of,all European manufacturing 'countries, reached the point Eta which the rate of exchange constitutes a very subitexitial preference in favour, of the foreign as against the home manufaeturer. Taking one example, we are aware of the desire of people in Italy to export large embers of Italian military vehicles, thoroughly repaired and overhauled, to this country. Under present citou,mstances, it would seem. inevitable that the importers 7will be able to undercut home prices even assuming the highest possible economy and the -best passible organization in the -British industry.

• In effect, the rate of exchange enables these vehicles to be imported under conditions equivalent to dumping, and the Government has assured us all along of its intention to take action in the event of any such contingency arising. In our opinion, by far the simplest action would be the extension of the present import duty, which would meet the ease fairly ,well for the present.

With the case 'of the farm tractor we have dealt on previous occasions in some detail. Here we have a young industry in danger of extin,ction at birth. The position Would be better met by a limitation of import, designed so that the real needs of the fanning community could be filled at the lowest possible cost, but providing at the same time against any unnecessary importation. At the present juncture it might, however, be very difficult to give effect to any such a-rrangement, and, therefore, in this case also, as a temporary expedient, we believe that the best plan would be to extend the import duty at. present applicable to motorcars so as to include all agricultural motor machinery.'

Progress Towards Power-Alcohol Production.

THERE ARE many indications to show that the missionary work of those who have for years past emphasized the claims of alcohol as a motor fuel is, at last, to be•aiii fruit.. By providing an organization for the investigation of scientific problems in 'connection with alcohol in the Fuel Reseal-eh Board. the Government has, at least, done something to show that it has taken some account of the report of the Alcohol Motor Fuel Committee. The Imperial Motor Transport:Council, which had this matter in hand prior to the war, -is now in course of forming an Empire Motor Fuel Cammittee, and ha-s entrusted the work of convening that. committee to Mr. Shrapn.ell-Sinith, who, with the late Sir Boyerton Redwood, wasthe moving spiritof ' the Alcohol Motor Fuel Committee at the Petroleum Executive. It thus becomes clear enough that t•hie Empire Motor Fuel Committee is likely to concentrate a great deal of its attention upon the. subject of alcohol.

We understand that the committee in question is likely to be an extremely representative and influential one. The Coancil to which' it will report, and which will, no doubt, adopt and act upon its decisions, is se constituted as tb enable it to negotiate very effectively withall the Governments of the Enepare. Though the Council, eas a whole, is not official, its members individually are nearly all officials'of high standing, wnose communications to their respective Governments will certainly not be shelved or ignored without the fullest possible consideration' having been given to them. .

Then, again, it inould appear that the attitude of the big distillers towards the production of power alcohol has changed very mucli during the last few years. It is now generally realized that. the pioneers of alcohol fuel were. right when they said that the supplies would be created in the Empire overseas, distilled upon the spot and ultimately snipped to the users. So lone asthe impression prevailed that a serious attempt would be made to grow aleohol crops iretlais country, the distillers viewed the whole proposition with distrust, being doubtful how it would affect -the more lucrative parts of their existing busie ness. Now, one gathers that, if agriculturists and

clg colonists will bind themselves together to grow alcohol crops in considerable quantities in any suitable district, the distillers wilt be perfectly willing to erect distilleries in any such district, to aay a, good price for the raw material, and to enter into an agreement under which the growers will participate in subsequent profits due to the sale of the fuel. It would not beat all surprising if the earliest developments in this direction were to take ail:ace-ill tropical Africa, perhaps in British East Africa and UgandaThere is no reason at all -why other big developments • should not occur almost immediately in India and in. the Northern Territories of Australia. The petrol importers are, by their price increases, providing the finest propaganda that the tolvocates of fuel alcohol could possibly want, end, altogether, it is rapidly becoming inconceivable that this tremendous opening for the development of a, new agricultural industry, coupled with the solution of the liquid fuel problem, will be much longer ignored by practical and financial men.

Councils and Motorbus Services.

HE ACTION of the Martley ILD.C. in regard to a bus service which runs through Monks-wood to Sinton Green, in Worcestershire, is another instance a the intolerance of local councils, which further goes to prove the urgent necessity for some action being taken by the. Ministry of Transport to see that country 'districts axe Lot deprived of (as in the present instance), the only means of transport they have besides the carrier's cart.

It is curious how some comocils seem to. disregard' the fact that reads are made ead maintained for use. Some country roads, we admit, are• not in a fit condition to carry very much heavy vehicular traffic. But they can be made to meet the requirements of the neighbourhood. And, in this particular instance, the road is used less by the motorbus than by ordinary commercial motor and steam vehicles. • Besides, there is another way Gut of the difficulty. If the road is not a main roan, anti not. wide enough or strong enough in metal to carry heavy motorbuses, surely it is sufficient of e, road, to carry light buses.

In Herefordshire, where many of the second-class roads are both narrow and soft. ::t„. is proposed to run lighter conveyances. For serving the more sparsely populated districts, several light motorbuses are in iew and will play the part of local carriers. They will be compact vehicles of new design, with seating space for 15 to 20. One of these light conveyances is to be run for the benefit-of the Golden Talley district, catering for the markets of Hay, Hereford, a•nd. Abergavenny. The Weobley district is also being loolced into. -This is more like business, and it would he more in keeping with modern development and progress were the litlartley R.D.C. to take pains to •encourage the linking upavith the remainder of the districteand with Worcester of the particular piece ef country in question, rather than to place hindrances in the way of bus owners.

After all, bus services in these thinly-populated country districts are not very. profitable ventures, and, if the council has any regard 'whatever for the welfare of the inhabitants, it ought to encourage any firm willing to undertake the business of running a bus service, But this is only one example of many attempts that are being made throughout the counties to discourage. the use of the roads for motor omnibuses:

For instance, the Glcucesters-hire County, Council have refueed to allow a, motorbue to run from Gloueee ter through the villages of Maismore, Hartpury, Corse, Staunton. Recimarle,y, • Branielaerrow, and Parkway to Ledbury. Some of these places are in Worcestershire and Herefordshire, but are equally affected by the decision and, as the Council already have buses running on some of their reads, one won• ders what -reason can have caused them to take a, decision which means the isolation of people living in those districts which are beyond the extent of carriers' carts and bicycle services, as every village mentioned is far removed from any railway station.

When-America Goes Dry—of Oil. .

WHAT AMOUNTS to a new light has been thrown on the world's oil position by Sir E. Mackay Edgar in an article which he has just written for The Sunday Times. He refers to the profligacy of the United States and shows how she has so misspent her legacy of oil that the indications of "going dry" in that commodity are unmistakable. America, last year, impo'rted forty million barrels (of 42 gallons each);of. Mexican oil and, before . ' 1921, she will 'find herself short of-petrol by a hundred million gallons. . He then goes on to show that the great leaders of the American. oilt'industry understand the position and, for the past few years, have been scouring the World for new oil fields only to find, however, that, almost wherever they, turn, British enterprise has been before them. The Alves group, whose holdings encircle practically two-thirds of the Caribbean Sea, is wholly British, and no American citizen or group has acquired, or can acquire, any such position in Central America. The foresight of the British Government has secured for this country a majority interest in. the ordinary shares of the AngloPersian Co., and our position; in Mesopotamia ensures the British interests the development of the local oilfields. The Shell group is referred to as being " ably' financed and superbly. managed" and as having controlling interests in every important oilfield in the world. America has only her own continent, some of the Mexican fields, and some interests in Central America, the rest of the world being barricaded against any invasion by her. Thus, it cannot be longer than ten years before America will be under the necessity of importing five hundred million barrels of oil per year and having to pay out in dollars, which must go into,British pockets. ft.is a comforting thought and, in the future, when some enthusiast rises in one of New York's high-class restaurants and asks in a loud voice, "Who won the (oil) war ? " he will not receive the answering shout , of We did!" that would have greeted a slightly different enquiry any -time during the past sixteen months or so.

Sir E. Mackay Edgar is at, the head of the great British financial house_ of Sperling and Co. with enormous interests in shipbuilding and, we ;believe, also in oil production; • his activity in increasing Great Britain's fleet of tankers (fortiansport is one of the keys of the oil situation) may, therefore, be relied upon to the fullest extent.


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