AT THE HEART OF THE ROAD TRANSPORT INDUSTRY.

Call our Sales Team on 0208 912 2120

Budget blues or red herring?

8th March 1968, Page 25
8th March 1968
Page 25
Page 25, 8th March 1968 — Budget blues or red herring?
Close
Noticed an error?
If you've noticed an error in this article please click here to report it so we can fix it.

Which of the following most accurately describes the problem?

This is the time of year when sectional interests tell the Chancellor of the Exchequer what they would like to see in his Budget. The RHA and TRTA have just sent the new Chancellor a powerful plea for tax reductions, very justifiably stressing not only the colossal amounts already paid and the steep increases swung on to road transport in recent years but also the fearful financial prospects which impending legislation holds out (not least in drivers' hours cuts, about which we carry some pretty weighty evidence in this issue).

Meanwhile, it seems very likely that by the time these words are read the Government will have announced plans for a timetable motion to cut short discussion of the Transport Bill—a monstrous but not unexpected move which will reflect directly on those who apparently thought this huge ragbag of legislation would be swallowed without demur.

It might be thought that the two subjects—Budget and Bill—have no direct connection. But an article by Mr. Douglas Jay, until recently President of the Board of Trade, in the Financial Times this week• suggests a possibly significant link.

Postulating that the Chancellor must go for more revenue through indirect taxes, Mr. Jay selects motor vehicles and oil (fuel) as those least likely to provoke pay claims—of which it seems the Government lives in near-mortal terror in the present dodgy economic situation. He comments: "This will no doubt raise a scream from the vested interests concerned; but the object of the exercise is not to please." But this is not the climax of the matter. Come just a little farther and all will be revealed.

Why motor vehicles and oil? Because these are expansive industries yielding a revenue which will not decline as tax rates are raised, and the "present excessive growth in vehicle population makes for exorbitant demands for spending on new roadbuilding". Indeed! But surely they are expansive industries because they carry the growing volume of essential supplies required by an increasing population, and should be encouraged? Why not remove the railways' enormous fuel tax rebate? It is yet another hidden subsidy. But now we come to the crunch.

Mr. Jay asserts that despite recent increases in motor vehicle duty on lorries, rates in Britain are far lower than in other industrial countries and "an increase could also make the whole quantity licensing apparatus of the Transport Bill unnecessary".

Is this, perhaps, going to be Barbara's way out? Agreeing to drop, or postpone, quantity licensing to speed the Bill, and rely on even heavier fiscal measures to push freight from road to rail? If so she will be flying in the face of her recent track costs report, which stressed that it would take a whole lot more than marginal cost increases to effect such a traffic switch. And to judge from the BR chairman's remarks this week he is relying on quantity licensing to give him about half of his share of growth traffic between now and 1973-4.

Whether Mr. Jay's suggestions are personal guesswork or inspired coat trailing they make unhappy reading for the transport industry. And, if only someone would take a wider view, unhappy reading for consumers—which means all of us.

Road transport is already contributing far more than its fair share to the Exchequer without the sort of quid pro quo on which Mr. Jay seems so keen.

Tags

People: Douglas Jay

comments powered by Disqus