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FUEL ADDITIVE
Page 96
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EVERY haulier would have been justified in applying a surcharge to his rates as soon as the Chancellor of the Exchequer announced an increase of 10 per cent. in purchase tax and in Customs and Excise duties, including the tax on liquid fuel which already stood at 2s. 6d. The intention was, in Mr. Selwyn Lloyd's own words, to " withdraw purchasing power from the economy,and not to interfere with the basic industries and services.
The export drive might be encouraged by reducing home consumption, but not by increasing the cost of running the vehicles that have to carry the exports to the docks. As hauliers have pointed out, there is an obvious anomaly in an appeal by the Chancellor for extra effort from an industry on which he is imposing an extra tax.
There may have been technical difficulties that prevented him from discriminating between the various uses of imported petrol and , diesel oil. It. would have been necessary to make some distinction that would show whether the fuel was being used in private cars or commercial vehicles. No doubt anticipating all sorts of objections, the Chancellor had framed his legislation so that it was bound to apply uniformly over the whole "range of duties. To every protest. he is then able to provide the standard reply, that unfortunately the Finance Act he had introduced earlier in the year effectively absolved him from even considering the requests he received subsequently.
HE may well have expected, however, that commercial vehicle operators would take the increased duty into account in calculating their charges. The extra 3d. a gallon was a deliberate act of Government policy that could have no other effect than put up the cost of transport. It was in this respect different from other recent cost increases. such as the altered national insurance and pension contributions and the higher rates for premises, both of them items that apply generally, or the increases in insurance premiums (for which the Government could hardly be blamed).
The haulier should have all the encouragement he needs for an immediate increase in his charges. Nearly all his customers have cars or vans of their own; they would share his resentment at the Chancellor's latest imposition, and would be expecting an application for a higher rate. They would find it just as easy as the haulier to work out what the rise should be. An extra 3d, means roughly 6 per cent. on the cost of fuel, which represents very roughly about one-seventh of an operator's total expenditure. A surcharge of 2d. or 3d. in the would therefore more or less meet the case.
When the issue is so simple, there seems 110 reason to complicate it by bringing in third parties to arbitrate or by waiting, for example, for an official recommendation from the Rates Committee of the Road Haulage Association. The customer knows what is involved. He knows that he would have to cover precisely the same additional cost if he went to another operator, or if he used his own vehicles. The surcharge could be applied and shown separately instead of being merged into one rate. This would meet the possibility either that the Chancellor takes off the 3d. within a reasonably short space of time or that the R.H.A. committee issue a recommendation for an increase that would include the extra duty.
The committee have a somewhat difficult problem on their hands at the present time. There are at least three different categories of cost increase with which they have to contend. There are the straightforward examples to which I have already referred; there is the almost provocative 3d. in the gallon now imposed by the Chancellor; and going through what it is now fashionable to call " the pipeline" are the proposed new scales of wages that are coming up for further consideration by the Road Haulage Wages Council on September 21.
For the committee to have to meet immediately after the Chancellor's statement and recommend a surcharge of, say, one per cent. to take care of it would at least have settled that point, and would have strengthened any subsequent approach by hauliers to their customers. But this might have seemed a small reason for calling a fairly large committee together, to make a decision, moreover, on a point that is surely simple enough for each individual haulier to work out for himself.
ANOTHER drawback would be that a decis:oa restricted to the fuel tax would appear by implication to pass some sort of judgment on the other cost increases that have already accumulated. The aim of the Government is a standstill in prices as well as in wages. Trade and industry are in general sympathy and reluctant to disturb a delicate position by putting up their charges just at this moment For the most part they would find it inconvenient to say this in so many words or even to imply it. Circumstances might alter swiftly and compel them to put into operation an increase they might then appear to have forsworn.
Hauliers are in a similar quandary. The last recommendation of the Rates Committee, in October, 1960, was for a 10 per cent, increase. Since then, miscellaneous increases in operating costs, even excluding the higher fuel duty, may have amounted to something between 6d. and Is. in the f. Hauliers will want to have this amount incorporated in their rates at some time or another, even if they take no immediate action. They cannot afford to let it be said that they have even tacitly agreed to absorb the increases and to say no more about them. This could be argued against them if they took official and collective action now on the more recent increase and ignored those that came before.
AN additional complication is that for the first time since the road haulage wages machinery was set up there is a reasonable doubt that a set of proposals _will not go unaltered through the remaining stages. The Minister of Labour has asked the Wages Council to take full account of the Chancellor's statement in the House of Commons in July, and has added that he himself will certainly bear the statement in mind if recommendations are submitted to him.
The council will not ignore his request and the employers' side may well feel they should be careful not to commit themselves in advance. It might be held that they had done so if, before the meeting, the R.H.A, issued a recommendation, however provisional, for an increase in rates that included the effect of the wage proposals now before the industry and bearing the serial number R.H.(71).
This may not be quite the time to seek a large and comprehensive increase in rates. All the same, no haulier ought to hesitate about asking for what he requires.