Political Commentary
Page 54
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First Principles
By JANU
OLD Mother Hubbard found a disciple the other day in Mr. Arthur Deakin, general secretary of the Transport and General Workers' Union, who pointed out that wage increases would be hard to get in industries, such as mining and transport, where profits were not being made and the coffers were empty. Higher wages, he implied, meant higher prices, and could be won only at the expense of the consumer.
Perhaps Mr. Deakin did not particularly have road transport in mind, but his remarks fit neatly into the train of thought started by the demand from his union that the Government be asked to cut the fuel tax down at least to what it was before 1950. The ensuing fall in costs should provide a margin out of which might come some reduction in fares and rates, also an increase in wages, so that everybody would be pleased except the Chancellor of the Exchequer.
At last, the long campaign against the exorbitant fuel tax has attracted to its support almost every section of the community. The facts and figures have been published time and time again. The final obstacle is the illusion in the official mind that a tax, once it has found its way, so to speak, into currency, becomes sacred and acquires a mysterious moral justification. Income tax, originally imposed with reluctance and amid apologies, has become a Treasury staple. Purchase tax, devised during the war as a way of restraining public demand for certain commodities, was sanctified by the Socialists as an ideaf weapon for soaking the well-to-do. Much of the opposition to the transport levy was caused by mistrust that, after its original purpose had been served, an excuse would be found for making it permanent.
History can provide no better example than the fuel tax to show with what subtlety successive Chancellors have shifted their burdens on to the wings of the angels. The first impost, lasting for 12 years from 1909, cannot properly be described as a tax. Mr. Lloyd George, the Chancellor at the time, said that the whole of the money Collected would be dispensed by the central authority "upon a scheme for the improvement of the roads, but the improvement must be made in reference to motor traffic."
Exotic and Febrile Possibly because the Exchequer grew tired of handling money from which it gained no advantage, the tax was repealed in 1921. When it was revived a few years later, it had changed its character very much for the worse. Sir Winston Churchill, to the disapproval of the Labour Party in opposition, levied 4d. per gallon on petrol to finance provisions made by the GovernMent for rating relief. The tax was still earmarked for a special purpose, and not regarded as • part of the general revenue, but some of Sir Winston's remarks foreshadowed the shift towards the opinion that this exotic and febrile new fuel lacked the stolid British virtues and ought to be discouraged. "Weighing the issue between coal and oil, and weighing the issue between road and rail, and contrasting the rapidly expanding pleasure traffic with the depressed and struggling condition of our basic industries "—In this old Testament vein Sir Winston prepared the ground for the more laconic, even . offhand, condemnations of later Chancellors.
cl 6 Not long afterwards, the Labour Party had the oppo tunity of showing what they thought of the petrol ta Their Chancellor, Mr. Philip Snowden, gave a singular faithful imitation of the walrus deploring the fate of ti oysters. "I withdraw nothing that I have said abo this duty," he declared in his Budget speech in 193 "But," he continued, "I find the tax in existence ar fruitful in its yield, and the stern necessity of the prese emergency, and that alone, compels me to make u of it for the time being." In the process, he increas4 the tax to 6d. per gallon, and a few months later, his emergency Budget, added another 2d., with suitat regrets.
Since then the tax has never looked back. In 193 Mr. Neville Chamberlain brought the tax on oil ft: up to the same level as that on petrol. Next year I severed what links remained between receipts from tl tax and expenditure on the roads. All the money we into the Treasury, and payments were made separate into the Road Fund. The tax went up to 9d. per gall, in 1938, as a result of Lord Simon's Budget.
Act of Grace Fuel rationing during and after the war appear to give substance to the arguments in favour of su pressing the traffic in petrol and oil. The public we conditioned to accepting liquid fuel as an act of gra on the part of the Government. The tax, said .! Stafford Cripps in 1950, had not increased since befc the _war. "The time has come when some other aut matic methods of restricting consumption of petr such, for instance, as the shortage of vehicles, are d appearing, so that fiscal inducements to economy ha become necessary." He doubled the tax, his success a year later increased it by 7fel., and Mr. Butler in 19 rounded the figure up to the present total of 2s. ( per gallon.
The Transport and General Workers' Union are pi posing that the tax be reduced to 9d., and they are doubt aware that the price per gallon would then within a penny or two of what it was early in 19. before the Cripps Budget. The saving in the cost transport would be passed on to the public in reduc fares and prices. There would remain the problem the roads. They were to be rebuilt and augmented ( of the taxes on users, but the pledges to this effect vvi disregarded and almost forgotten. It is somewhat si prising to be reminded that, when Mr. Lloyd Geo' instituted the Road Fund in 1909 he told Parliament ti the motorists, who were to bear the brunt of the expen were "willing, and even anxious, to subscribe hai somely towards such a purpose, so long as a guaran is given in the method and control of the expenditur Road users have learned to greet taxation with 1 enthusiasm. Even a tax of 9d. per gallon would prodi an annual yield greater than the payments out of 1 Road Fund, and this leaves out of account the coni butions to the Exchequer from motor vehicle dull It would be helpful if the T.U.C., having asked foi remission of taxation, would then suggest the spend of more money on roads. The old principle that wl the road users paid should be spent on improving th permanent way might by this means be revived.