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MPs are bracing themselves for another fuel tax shock in the Chencellor's Budget next month.

4th April 1975, Page 21
4th April 1975
Page 21
Page 21, 4th April 1975 — MPs are bracing themselves for another fuel tax shock in the Chencellor's Budget next month.
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Which of the following most accurately describes the problem?

There is growing expectation that Mr Healey is planning a drastic revision of the entire system of vehicle taxation.

One proposal known to be under examination is the scrapping of the £25 a year licence duty for cars and the recovery of the lost revenue by means of an extra 10p on the tax on petrol.

Vehicle licences at present provide the Exchequer with £540m a year.

Treasury officials estimate than an extra 10p on petrol at the present rate of consumption, would more than recover this sum.

And it would still be enough even if there were to be a reduction in fuel consumption, which is part of the Chancellor's calculation.

The motorist who at present pays his £25 a year whether he uses his car regularly or not would be better off. But it would be a heavy blow for the big mileage driver.

It remains to be seen whether Mr Healey's review of the licence duty system will extend to commercial vehicles.

There would almost certainly be exemption for bus operators.

Mr Healey has already assured Labour MPs that the prime objective of his Budget will be to keep industrial costs down and promote increased productivity.

His problem is to balance this objective with the Government's declared policy for curbing fuel consumption.

Some MPs still expect the Chancellor to go for a twotier petrol pricing system.

Mr Healey seems to have abandoned earlier proposals for varied rates of vehicle licence duty according to engine capacity and fuel consumption or length and weight.

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