Burning the Candle
Page 53
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The Chancellor receives many appeals for reductions in duties at this time of the year and the proposal made by your Federation will be considered with these other representations when the Chancellor reviews the whole .field of taxation before the Budget in the light of the economic circumstances of the country."
From the Chancellor's Private Secretary to the British Road Federation
IN a few days, the result of the Chancellor's review will be made public. Many orthe people engaged in road transport have given up expecting that their industry will gain any advantage from the Budget this year or for many years to come. Their only hope is that some new taxation will not be imposed upon them. As Budget day draws nearer their gloom deepens. They talk among themselves of petrol at 5s. a gallon and purchase tax on commercial vehicles at 66rt per cent. They are already calculating the consequent increase in costs and in rates and fares. Behind closed doors their representatives put the finishing touches to dignified messages of protest prepared in anticipation.
Retaining Handicaps ?
There is some justification for the pessimists. Several reasons may influence the Chancellor towards retaining or increasing the handicaps laid on road transport. There is a shortage of steel coupled with the advantage to be gained from selling abroad as many as possible of the British vehicles that can be manufactured. Petrol has to be imported, even if not necessarily from the dollar area. The decline of the railways is in inverse proportion to the growth of road transport and it is natural, if erroneous, to assume that the restriction of one will benefit the other.
Most Chancellors in recent years have appeared to assume that a tax on petrol, and latterly on commercial vehicles, is no more than a good method of bringing money into the Exchequer and should be increased, rather like the tax on cigarettes and beer, as near as may be to the limit that the public can afford. Mr. Hugh Gaitskell put this point of view succinctly last year. "In our present circumstances," he said, " there is a. good case for a further contribution from this source to provide additional revenue."
Illustrious Collectors
Mr. R. A. Butler cannot altogether ignore the policy
. of his predecessors. To ease the burden on road users he must shift it on to some other section of the community. Taxation of road transport has a long history studded with the names of illustrious collectors including the present Prime Minister. The last Chancellor put 41d. a gallon on the petrol tax. The year before Sir Stafford Cripps had added 9d. There is no overwhelming reason, however, why Mr. Butler should begin where Mr. Gaitskell left off. He has an opportunity even at this difficult juncture to show how much better than most former Chancellors he understands the true place of road transport in the national economy.
In times of stress, such as the present, the Government finds it convenient to divide the activities of the public into those which should be encouraged and those which should not. Some industries are helped to expand and even subsidized if necessary. Others are restricted and heavily taxed. Why road transport should for so long
have been relegated to the second category it is hard to say, unless it be that the industry provides only a service and has no tangible product to show for its pains. It may not be an export industry but it is a vital link. in the export chain. Some road transport is for purposes not strictly necessary, even for pleasure, but the amount of fuel used for such purposes is no more than 15 per cent. of the whole. The attempt to differentiate between essential and frivolous use by rationing has been abjured by the Government.
Cavalier Treatment
It would be wrong to say that any politician consistently denies the importance of road transport. When Mr. Attlee described it as the conveyor belt of industry he was plagiarizing innumerable other eminent commentators of every political persuasion. If challenged on the point, even the Socialists agree that road transport is essential. What they do not appreciate is how much is lost as a result of the cavalier treatment that successive Chancellors have given to the road transport industry.
Quick, cheap and reliable transport depends on the cost and quality of a number of factors, including the
vehicles, the fuel and the roads. From the tax on vehicles and fuel the Chancellor obtains three times as • much as the whole of the annual expenditure on roads. He must realize that in the long run trade and industry and the public not only pay the tax by way of increased transport charges, but have to meet extra costs because. of the deterioration of vehicles and roads. Ever since the outbreak of war in 1939 road transport has largely been living on its capital. The highways have barely been kept in a decent state of repair and there has been virtually no new construction. The number of new vehicles released to the home market hasat no time ' been enough to replace normal wastage, so that the average age of the country's road transport fleet is steadily increasing.
Taxed Too Far
Efficiency of operation has so far kept the consequences of this neglect from becoming too apparent. Had the industry been free to develop, or had it not been taxed far beyond the Government's requirements for road expenditure, the service to trade and industry would certainly have been cheaper and probably better, and the price of every commodity would now be less than it is. No enterprise can carry on indefinitely under the twin handicap of high taxation and neglect. Either road transport should be relieved from part of the financial burden or it should be allowed to bring its equipment up to date.
It is not good enough for Chancellor after Chancellor to go on burning the road transport candle at both ends by taking millions -of pounds out of the industry, in taxation and putting nothing back in the form of road improvements and new vehicles. For a change it would be inspiring to have a Chancellor well disposed towards a policy of cheap transport. Perhaps the grave situation makes it impossible for Mr. Butler to adopt such a role in his 1952 Budget. At least he has a chance, in his accompanying speech to come out on the side of the angels and show clearly that he appreciates the true importance of the road transport industry.