P.T. on Goods
Page 58
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Chassis Causes inflation—Sir
William Rootes
THE imposition of purchase tax on goods chassis was quoted last week by Sir William Rootes, chairman of Rootes Motors, Ltd., at the company's annual general meeting, as an example of Government action contributing to inflationary pressure.
" The heavy rise in the cost of tyres," he said. "has inevitably led to increases in the price of commercial vehicles. Purchase tax is calculated and added as a percentage to the price and. in consequence, the cost of transport is increased, not only by the increase in tyres, but by a greater amount of purchase tax.
"And so it goes on. Higher purchase tax chasing rising 'costs, and rising costs, in their turn, chasing higher purchase tax, like a bee-swarm rising out of sight. Unfortunately, the public's honey is disappearing with the swarm," he added.
Sir William described purchase tax as "iniquitous," and said that it should be repealed forthwith.
Speaking of the shedding . of the electrical load, he said: "Men are standing idle, man and machine-hours are being lost and disorganization results. Moreover, the real cost is incalculable."
He was concerned at the present prospect of rising costs.. For some time the company had been able to combat increases in the costs of materials by greater efficiency, It would try to continue to do so. All the help that the Government could -give was required to overcome the shortage of basic materials in order to keep the corn
pany's factories working at a reasonable volume, and thereby hold down costs.
Sir William said that the Government was in a difficulty in deciding how to carry out the defence policy without seriously affecting exports.'" The longer the period during which industry is kept in the dark as to the Government's' intention, the worse the position must become," he added. Referring to the acquisition of Tilling Stevens, Ltd., he said that considerable reorganization and expenditure would be necessary, but the board • had every hope that the company would • become a useful addition to the group.
Rootes products, he said, were now being assembled 'in Australia, New Zealand, India, South Africa, Eire, Mexico and• Argentina. "We believe that by meeting the growing industrial development, where necessary, by these methods, we are 'safeguarding volume production for our home factories," Sir WilliaM said. "Moreover, the alternative is simple and compelling—it is to withdraw from these markets."