Pyrrhic victory
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FREEDOM of choice, which is inscribed on the banners of road operators fighting the Transport Bill, was not even offered to them when the Government was making up its mind on the best way of raising more taxes. There are many reasons for suggesting that the whip of Mrs. Barbara Castle would have been preferred to the scorpions of Mr. Roy Jenkins.
Operators of light vehicles would have had no hesitation. There was no proposal to tax them in the Bill whereas the budget imposes an increase in motor vehicle duties ranging from one-third at the lower end of the scale and rising to one-half by the time the unladen weight reaches 4 tons.
For operators of the heavier vehicles and in particular those carrying abnormal loads the advantage might seem to lie with the Chancellor's taxes.
The proposals in the Bill would have meant for the most part something like 80 per cent on the old rates. An addition of between ls and £15 per mile on the cost of a journey with an abnormal load would have made the carrier very much worse off.
Hauliers' view
Heavy hauliers do not see it this way. The abnormal loads tax had the one advantage that it related to individual journeys. The exact amount could be assessed in advance and in fact would have had to be paid in advance. There was no possible argument against passing the cost on to the customer in full. In few if any cases would the haulier have lost the job because of the increase in price. For the most part no alternative means of transport is available.
Superficially the wear and tear tax might have seemed a worse bargain than the more general budget increase. On the other hand operators would have enjoyed a few months under the previous rates until the Bill became law. There was always the possibility of amendments during the Parliamentary process.
The defence which the Ministry officials found for the wear and tear tax was notably feeble. It has a bad Press and in general the experts who have examined it are not prepared to accept its findings. There is a strong suspicion that the Minister was only too pleased to unburden herself of the tax proposals and leave the Chancellor to promote the impoverishment of operators through the more traditional channels.
This does not mean that the Minister's opponents have won any kind of a victory. She expected her wear and tear tax to bring in a revenue of £30m a year to which the carriers of abnormal loads would have added £3m, bringing the total to £33m. The new duties on commercial vehicles should give the Chancellor not less than £40m a year extra and there will be another £30m a year from the fuel tax on the same vehicles.
Nobody took seriously the hint that revenue derived from the Bill would in any way affect the amount of money spent on the roads programme. The Minister was to collect the money but it was then to be paid into the Exchequer. It was at least some thing that the tax would have a separate title. There would have been lip service to the principle that road users who paid so much in taxes ought to receive something in return.
The new danger that could arise is that operators may get the worst of both worlds. According to the statement which she issued on budget day the Minister has postponed rather than relinquished her right to introduce taxes of her own. She represents herself as pleading with the Iron Chancellor that two doses of very heavy taxation in a single year would "impose an intolerable burden on the road haulage industry". No doubt hauliers would have preferred her to use the other cliché about killing the goose that lays the golden eggs.
"I therefore proposed that these charges should be withdrawn from the Transport Bill," Mrs. Castle continued. "I am glad to say that the Chancellor agreed."
Mrs. Castle will no doubt be equally understanding if the thanks from the road transport industry are less than warm. However graceful the withdrawal she had been careful to leave her options open. , The purpose of the wear and tear charge, she says, was only to bring the taxation of heavy goods vehicles into a better relationship with that of other road vehicles. The more frequently she makes this statement the more trivial a reason it appears for imposing an extra burden of £30m a year on trade and industry.
The Chancellor has had this "better relationship" in mind, says the Minister. He has paid regard to it by imposing larger percentage increases on the excise licences of heavy vehicles. "The increase in fuel duty will tend to have a similar effect."
Intractable figures
The report on road track costs intended by the Minister to justify her wear and tear charge came to the conclusion that motorIsts paid in fuel tax and licence duties 2.1 times their share of road costs; public service vehicle operators 1.4 times; users of light vans 3.3 times; and operators of heavy goods vehicles 1.8 times. From these intractable figures it was necessary to prove that the last-named category should be taxed more heavily.
The bold approach seemed best when the Minister alone had nothing to lose. It was the policy to encourage public transport, said the report, so that no further charges would be imposed on buses. The budget adheres to this policy although p.s.v. operators come nearer than anybody else to getting their roads on the cheap.
Light vans are worse off on this assessment for what it is worth. But to reduce taxation on such vehicles below the level for cars, says the report would lead to substitution between them and cars. The catastrophic consequences of such a development are not explained.
The budget dares to run the risk. The motor vehicle duty on the very lightest vans, not exceeding 12cwt, was previously £18 a year or lOs more than the duty on a car. The new duty is £24 as compared with the car rate of £25. Presumably we now await the rush to transfer from one category to the other.
When the figures are re-calculated in accordance with the new rates of tax the one certain result is that all the ratios will be higher except that for buses. There ir no reason to suppose that they will all lac exactly the same as each other. The Ministei by her own reasoning would then be entitlec to propose re-adjusting the levels by mean of a new version of the wear and tear tax Her words have been carefully chosen. They indicate that she has not completely abandoned the idea.
About the abnormal loads charge she i: less circumspect. The case in its favou: "remains valid", says Mrs. Castle. Thi: section of the road haulage industry "is no meeting the true costs it imposes and is ii effect being subsidized by the community'. Only the new situation created by the budge has made her hold her hand "in presen circumstances". The intention is evident t, reintroduce the proposed charge when th time is more auspicious.
Academic discussion
If there has been a change it is for th worse. Budget proposals are in a specia category. They come into effect when the: are announced and before Parliament agree to them. The debate after the event become a purely academic discussion.
The heat has been withdrawn from th Opposition to the wear and tear tax and th abnomal loads charge. The Minister ha got what she wants by a different rout( She can withdraw the proposals from th Bill and represent the empty gesture as concession. Parliament will have no oppoi tunity to discuss what is no longer then Road operators are in some difficulty The new taxes supplied material for one c their main objections to the Bill and ri presented the only point on which the co! to the community could be assessed wit reasonable accuracy.
In their own interests they must contint to remind the public of the taxes and relai them to the campaign against the Bill bi they will find this more difficult with tlpassage of time. For them the deletion of ti offending clauses is at best a Pyrrit victory.