Budget Tactics
Page 47
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AT this time of the year, there rises to a climax the confused sound of appeals to the Chancellor of the Exchequer for cuts in this, that or the other tax. It may be that occasionally something is gained from this traditional cacophony that comes before the swallow dares, but the lack of harmony is more likely to induce the Chancellor to get out of earshot and to frame his Budget in his own way.
What is badly needed is a tax-cutters' association which can instruct its members in the right and the wrong way to approach the Treasury, and can even attempt to co-ordinate their present random efforts. Too much reliance is placed upon a formula which assumes that all taxation is the work of the Devil and goes on to prove that one tax in particular is a veritable abomination. The argument may be good, but the flaw in its application is that the comparison may not appeal to the Chancellor and that each critic names a different tax as the one that is most likely to break the public's back.
Treasure Hunt Another well-Worn device is to rail at public expenditure and suggest ,ways and means by which it can be cut down. The process is rather like that of a treasure hunt, where whoever searches carefully enough should be able to stumble upon some wonderful economy and claim the equivalent in tax remission for himself. The difficulty here is that revenue and expenditure are not balanced in this fashion, and somebody else may reap where the critic has sown.
Nearly everybody would like something off income tax, but the more vociferous objections are usually to other items in the national exchequer. There are various calls for the abolition or reduction of purchase tax. In the business world, the profits tax and excess profits levy are the principal targets. Manufacturers want changes in the wear-and-tear allowances on plant, machinery and buildings, and a restoration of the initial allowance of 40 per cent. Road transport users ask for the fuel tax to be cut.
Sympathetic Murmur
It is unlikely that there is a single tax upon which representations have not been made to the Chancellor during the past few weeks. What the effect has been will remain a mystery until Budget day, but many of the protests will inevitably cancel each other out. The Chancellor is bound to regard them with suspicion. If the critics frankly admit that the tax is hurting them personally, he may murmur sympathetically and refrain from pointing out that taxes are bound to be painful. If they maintain that the tax is unfair to their customers or to other sections of the public, he may prefer to wait until the third parties weigh in with their own protest. If the critics complain of the large amount they pay, is that a good argument to use with a Chancellor? If they call the amount trivial in comparison with the harm it does, he may feel tempted to add a bit more.
His job is difficult enough as it is. He has to wind up the national economy, and to adjust a vast number of checks and counterchecks so as to ensure that during the next 365 days it keeps as nearly perfect time as possible. A united organization of tax-grumblers should be able to look at the problem from the Chancellor's point of view. Having decided which tax of all taxes is the most iniquitous, it should concentrate the greater part of its efforts on that one issue.
Had this procedure been followed in the past, almost certainly the fuel tax would not have been so absurdly inflated. As the British Road Federation recently pointed out, the estimated yield for the current financial year will be f233m., nearly five times as much as the £50m. paid in 1950. There has, of course, been vigorous opposition each time the tax has gone up, but the effect has been weakened by the fact that nearly all the protests were from the transport industry itself and that even in those circumstances they lacked unity. Thus, one finds the representatives of passenger and of goods operators each urging tax remission for their own side of the industry, and there is a similar cleavage of opinion between the users of petrol and of oil fuel.
Little Persuasion It would be encouraging to see not only the transport interests but the whole of trade and industry pressing for a substantial reduction in the fuel tax. The general public would need little persuasion to join in. An article in The Commercial Motor for October 3 recommended the widespread use by goods and passenger carriers of posters and stickers calling attention to the burden placed by the fuel tax upon every road transport user, from the infrequent traveller to the industrialist consigning thousands of tons of traffic to road vehicles every week. One or wo organizations have followed the suggestion, but not enough to make a decisive impact upon public thinking.
The fuel tax provides an unparalleled opportunity for that elusive force known as public opinion to impress itself upon the Chancellor. A reduction would help everybody, for it would lead to cheaper fares and rates, and no sinister or imaginary vested interest stands to gain. There should be no opposition of any kind in Parliament. Last year, when 7Id. per gallon was added, the Socialists repeated, sometimes word for word, the Conservative arguments against the increase of 4Id. the year before. It is hard to think that a proposal for a reduction would make the Socialists change their opinion again.
Hardly Succeeded
What can be said in favour of a tax at the rate of 2s. 6d. on every gallon? It brings in substantial revenue in return for putting up the price of nearly every commodity. If its object is to restrict the use of imported fuels, it has hardly succeeded. There is no evidence, moreover, of a transfer of traffic back from road to rail. Nobody can seriously believe that a reduction in the tax would lead to an orgy of fuel consumption. On the other hand, it would certainly help in the campaign for a fall in the cost of living.
Perhaps the coming Budget will bring good news about the fuel tax. The likelihood would be greater had the public outcry been louder and more widespread. And it should not have been difficult to obtain the support of all sections of the public once the facts had been explained to them.