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Political Commentary By JANUS

27th March 1953, Page 50
27th March 1953
Page 50
Page 50, 27th March 1953 — Political Commentary By JANUS
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Which of the following most accurately describes the problem?

Keywords : Business / Finance

Lightning Conductor

0 • NCE proudly described as the " keystone " of the

Government's transport policy, the levy has gradually declined in importance. Many of its former opponents, notably the Association of British Chambers of Commerce, have nOw agreed a little grudgingly to tolerate it.

. Whatever one may feel about it, the levy in its time has been a remarkably good lightning conductor for the wrath of the Parliamentary Opposition. It has attracted its share of the energyexpended in debate, as well as providing material for one of the major concessions made to the critics of the Transport Bill. Once the Government had abandoned the idea of a permanent subsidy to the railways, the sting was taken from many of the objections to the levy, and the resistance to it noticeably lessened.

Nevertheless, it cannot be said that the Government have proved their ease. As good an attack as any on the levy was made over three months ago by Mr. Alfred Barnes, the former Minister of Transport. He drew attention to the dangerous precedents of the fuel tax and purchase tax, which are now beingused for 'purposes not envisaged when the taxes were originally , applied. The. fuel tax -in :Partiedkir • no.w. yielded approximately £230m. Per annum, "whereas the contribution from that taxation-7.-Which was originally imposed for the reconstruction of our road system—is -onlyin the neighbourhood of about f35m."

Purchase tax on motor chassis, and licence duties, -brought to £340m. the annual contribution of road users to the Exchequer. "It is grossly unfair and inequitable that an industry-of-this-character should-bear -the further burden of &tn. a year for the purpose of meeting a deliberate. act of Government policy." If the sale of

transport units resulted in a loss, Mr. Barnes concluded, . it should fall upon the Treasury and not upon a selected group of individuals.

No Practical Effect

These arguments have had no convincing reply. At the same time, it must be conceded that they have Fad no practical effect. The levy remains, and will be paid by certain categories of road goods carriers. More success has resulted from the piecemeal method of pressing for exemption on behalf of selected groups of operators. It worked particularly well for the owners Of vehicles with an unladen weight of between 1 and

tons. The levy class now begins with vehicles over 11 tons, although -it is a comforting thought that the unit of charge remains at 13s. 6d. As Viscount Swinton pointed out " Everybody has got used to the 13s. 6d." Presumably few operators will notice that they are being called upon to pay it over a longer period.

Opposition speakers naturally wanted to know why the rising tide of exemption should stop at l tons, when it could so easily proceed up to 2 tons. The Government refused to give way; 11 tons was the top figure and there would be no advance on it.

Whatever unladen weight had finallybeen fixed as the dividing line, there would almost automatically have been protests from owners of vehicles in the weight categoryimmediately above. If the, Government gave Way again, C-licence holders would complain—as in fact theY'have already complained—that they should not be expected to bear the loss on sales which are the concern only of the holders of special A licences. For their pars, the hauliers are no more willing to bear their share of the burden. The reason for the levy is that their future competitors will not be paying the full price for the assets they acquire. The hauliers will have to help meet the balance, thus subsidizing the competitors, who will be off to a flying start with no 25-mile limit.

Naturally, one has not heard opinions on the levy from the purchasers of transport units. They at least cannot hope to escape payment, but, were all the pleas for exemption to be granted, the purchasers would be left to bear the whole of the burden on their own. This would be a farcical situation, for if they were unwilling to pay the full price this year, they would be no more willing to pay part of it now and the rest in annual instalments.

There are such good reasons for not having a levy, and so few in its favour. As a result, the arguments ' advanced in Parliament for exempting various types of vehicle appeared forced and artificial. Urging that the limit be raised to 2 tons, Lord Lucas told the House of Lords that, having reluctantly accepted the levy, he wished it to be applied "as evenly and with as little hardship as possible." He did not explain how this desirable result was to -be achieved by making fewer people pay more.What no doubt impaired his logic was the feeling that, although it was desirable to raise the limit to 2 tons, it would be even better to lift it completely out of this world and to take the levy with it Excusing the Coalman On the other side of the debate, Lord Swinton endeavoured to draw a distinction between the coalman and the grocer to account for the fact that the variations in the weight of the vehicles they used would enable the grocer, but not the coalman, to escape the levy. "In the case of the coalman," said Lord Swinton, "his haulage is realty part of the business." One might have thought this a reason for excusing the coalman from an additional tax.

There is a good case for setting free the vehicles, or some of them, that are operated by local authorities. The sole success from the frequent representations on this score has been official recognition of the anomaly by which any tower wagons operated by local authorities attract excise duty and consequently the levy, whereas similar vehicles owned by transport undertakings are exempt. The lack of any better fortune may again be. because the levy in general is more iniquitous than any particular 'application of it. Mr. David Jones, M.P., tried to make the best of both worlds. "While l do not detract one jota from my objection to the levy as a principle because it is thoroughly bad, it is even worse that local authority vehicles should be subjected to this tax." A gallant attempt, although he could just as cogently have argued that it is wrong to steal a watch, but even -worse if it happens to be the Town Clerk's.

The levy is no longer the keystone, and its function as a lightning conductor is no longer needed. It would have been a magnificent gesture had the GovernMent . affirmed its faith in the future by dropping the levy completely. As it is, the most objectionable part is gone, and what remains may do no great harm.

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